tag:blogger.com,1999:blog-46361664608120138732024-03-05T07:24:21.284-05:00Journey to Financial MasteryRandyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.comBlogger139125tag:blogger.com,1999:blog-4636166460812013873.post-2227061228706144702017-07-12T18:10:00.000-04:002017-07-12T18:10:02.113-04:00Stormin
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<tr><td class="tr-caption" style="text-align: center;">Picture Credit: taxjusticeblog.org</td></tr>
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<span style="margin: 0px;">Congress
appears to be stuck in its attempts to make changes to the Affordable Care Act,
as well as its attempts to make significant changes to the income tax
code.<span style="margin: 0px;"> </span>In spite of that, the public
markets, both at home and abroad, turned in a very solid first half.<span style="margin: 0px;"> </span>In fact, some investment sectors turned in
their best first half performance since 2013, and in a couple of cases, since
2009.</span></div>
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<tr><td class="tr-caption" style="text-align: center;">Picture Credit: imgarcade.com</td></tr>
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<span style="margin: 0px;">Looking
at representative domestic stock indices for the first half of 2017, we find
the S&P 500 up 9.34%, the S&P MidCap 400 up 5.99%, the Russell 2000, a
broad small company index, up 4.99%, the Dow Jones Industrials up 9.35%, and
the NASDAQ Composite up 14.07%. </span></div>
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<span style="margin: 0px;">Exploring
subsets of these numbers, we find that growth stocks materially outperformed
value stocks, regardless of market capitalization.<span style="margin: 0px;"> </span>Domestic large growth was up 15.78%, domestic
large value was up 2.98%.<span style="margin: 0px;"> </span>In MidCaps,
growth was up 13.13%, while value was up 3.46%, and on the small cap front,
growth was up 11.64%, while value was down 0.52%.</span><span style="margin: 0px;"> </span><span style="margin: 0px;">Evaluating
sectors, we find that healthcare and technology led the first half, up 16.61%
and 16.94% respectively, while energy was off, down 13.68%.</span></div>
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<tr><td class="tr-caption" style="text-align: center;">Picture Credit: en.wikipedia.org</td></tr>
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<span style="margin: 0px;">On
the international front, the MSCI EAFE (Europe, Australia, Far East) Index was
up 13.81%, while the MSCI Emerging Markets Index (ex-Japan) was up 21.83% for
the first six months.<span style="margin: 0px;"> </span>Malaysia, Hong
Kong, and India’s Sensex had especially good runs, with each of them up between
16% and 20%.</span></div>
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<span style="margin: 0px;">Turning
our attention to bonds, we find that U.S. short term corporate bonds were up
1.68%, intermediate bonds were up 3.23%, and long bonds were up 5.76%.<span style="margin: 0px;"> </span>Government issues also had a good first half,
with short term bonds up 0.61%, intermediate bonds up 1.68%, and long bonds up
4.43%.</span></div>
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<tr><td class="tr-caption" style="text-align: center;">Picture Credit: dreamstime.com</td></tr>
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<span style="margin: 0px;">Turning
to economic data, we see that GDP growth for the first quarter, according to
the Bureau of Economic Analysis (BEA), was 1.4%.<span style="margin: 0px;"> </span>Consumer spending was off sharply during the
first quarter, and the personal savings rate increased to 5.1% of disposable
income.<span style="margin: 0px;"> </span>Consumer confidence remains
high, causing consternation among some economists, who assume a high
correlation between consumer confidence and consumer spending.</span></div>
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<span style="margin: 0px;">It’s
our thought that consumer confidence remaining high is a reflection of
household preparedness for economic change.<span style="margin: 0px;">
</span>Households are preparing for economic upheaval by continuing to increase
savings, continuing to reduce debt, and choosing to make solid choices when it
comes to discretionary spending.<span style="margin: 0px;"> </span>We
certainly hope that’s what’s going on.<span style="margin: 0px;">
</span>That’s what we see, though we do live in something of a bubble.</span></div>
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<span style="margin: 0px;">The
Federal Reserve announced that all 34 of the banks it checks annually for
financial soundness passed its “stress test”.<span style="margin: 0px;">
</span>The report also noted that the ten largest American banks hold 80% of
all banking assets.</span></div>
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<tr><td class="tr-caption" style="text-align: center;">Picture Credit: imgarcade.com</td></tr>
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<span style="margin: 0px;">As
we move into the second half of 2017, remember that the only certainty we have
is uncertainty, and that we are more than eight years into a bull market.<span style="margin: 0px;"> </span>We have found that disciplined financial
behavior gives each of us the freedom to ignore market swings and volatility.<span style="margin: 0px;"> </span>That disciplined behavior shows up in the
habits of spending less than we make, always having a reserve, avoiding debt,
making and executing on long term plans, and being generous with our time,
talent, and treasure.</span></div>
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<span style="margin: 0px;">Last
week, we celebrated Independence Day, what is often referred to as July 4<sup><span style="font-size: small;">th</span></sup>.<span style="margin: 0px;"> </span>This is the day we celebrate the signing of
the Declaration of Independence.<span style="margin: 0px;"> </span>With
the celebration almost a week behind us, let me encourage you to remember that
independence calls for self-governance, and that the price of the freedom,
embedded in the concept of independence, is very high.</span></div>
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<tr><td class="tr-caption" style="text-align: center;">Picture Credit: quotesgram.com</td></tr>
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<span style="margin: 0px;">There
are men and women, from Valley Forge to the Delaware River, from Tripoli to
Tunis, from Gettysburg to Antietam, from the Battle of the Somme to the Western
Front, from Pearl Harbor to Auschwitz to Iwo Jima, from the DMZ to Inchon, from
Hamburger Hill to Saigon to the Tet Offensive, from Stormin Norman to Desert
Storm, who have willingly put themselves in harm’s way, so we can enjoy our
independence, and celebrate these precious freedoms.</span></div>
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<span style="margin: 0px;">Quote
of the week:</span></div>
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<span style="margin: 0px;">“America
was not built on fear.<span style="margin: 0px;"> </span>America was built
on courage, on imagination, on an unbeatable determination to do the job at
hand.”</span></div>
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<span style="margin: 0px;"><span style="margin: 0px;"> </span></span></div>
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<span style="margin: 0px;"><span style="margin: 0px;"> </span>Harry
S. Truman</span></div>
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<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-66529231335444639072017-06-29T07:51:00.000-04:002017-06-29T07:51:03.425-04:00LIBERTY
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<tr><td class="tr-caption" style="text-align: center;">Picture Credit: clipartkid.com</td></tr>
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<span style="font-family: Calibri;">Health care funding continues to
dominate the political conversation, with the Senate introducing its version of
a new health care financing arrangement.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Stay tuned for more on this, as the House and Senate attempt to develop
a bill that will pass both houses of Congress.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">And whatever legislation is passed, look for it to be challenged in
court.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Finally, keep in mind that in the
U.S., we have the finest health care on the planet.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It’s the paying for it which remains the
challenge.</span></div>
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1IFOZrbRpbn1M9EI4TDkRO4uJpxPdAM8310PeZgUWouBhAOen6I8sDkDtSC9y-bXYSiqoHgpH2YhPWQYUBFRzpbqu10SkC6wfB_4pOK1_FdEmTytfnoLQ00SLlKn1k2kRRJCTgZwpX4U/s1600/home.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="180" data-original-width="274" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1IFOZrbRpbn1M9EI4TDkRO4uJpxPdAM8310PeZgUWouBhAOen6I8sDkDtSC9y-bXYSiqoHgpH2YhPWQYUBFRzpbqu10SkC6wfB_4pOK1_FdEmTytfnoLQ00SLlKn1k2kRRJCTgZwpX4U/s1600/home.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: parade.condenast.com</td></tr>
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<span style="font-family: Calibri;">In economic news, new home sales
rose 2.9% in May, to an annualized rate of 610,000 units.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The Fed rate increase last </span><span style="font-family: Calibri;">week took the Fed
Funds rate to a range of 1% to 1.25%.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Before the economic implosion of 2008-09, this rate was almost five
times as much.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Those attempting to live
on interest income have experienced this first hand.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">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.</span></div>
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<tr><td class="tr-caption" style="text-align: center;">Picture Credit: Fahrenheit-212.com</td></tr>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">On the business front, Coke
has announced the layoff of 400 Atlanta based employees.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">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.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-family: Calibri;">And Fulton County
Commissioners decided to freeze property tax assessments at 2016 levels.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Smart move on their part.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">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.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">At some
point, taxpayers resist, many voting with their feet that they simply won’t
stay and pay, indefinitely.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Just ask
Illinois.</span></div>
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<span style="font-family: Calibri;">According to Automotive News
Europe, the U.K. government plans to invest more than 800 million</span></div>
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<span style="font-family: Calibri;"> pounds, or
more than $1 billion, in new driverless and zero-emission vehicle technology,
as it seeks to become a leader in such technologies.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">You can read the entire article at </span><a href="http://europe.autonews.com/article/20170622/ANE/170629935/uk-seeks-to-be-world-leader-in-autonomous-and-electric-vehicles"><span style="color: #0563c1; font-family: Calibri;">http://europe.autonews.com/article/20170622/ANE/170629935/uk-seeks-to-be-world-leader-in-autonomous-and-electric-vehicles</span></a><span style="font-family: Calibri;">.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTjI1FKMwpq5DDt-uR4hWWtFLAqCwjwv5bC5fY1vFqit6-TAfPLa4v5l-Lqh8poTPcKrzXn7hfiCCV-dmAXMieKgc87YXILiEOKQUKvtmGOgyc0foruQ_SbbwqHfthnqjHSeRLKx9joJs/s1600/zero+emission.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="153" data-original-width="299" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTjI1FKMwpq5DDt-uR4hWWtFLAqCwjwv5bC5fY1vFqit6-TAfPLa4v5l-Lqh8poTPcKrzXn7hfiCCV-dmAXMieKgc87YXILiEOKQUKvtmGOgyc0foruQ_SbbwqHfthnqjHSeRLKx9joJs/s1600/zero+emission.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: greencharge.net</td></tr>
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<span style="font-family: Calibri;">In mid-May, a cyberattack hit
Microsoft Windows-based computers through a malware known as ransomware.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">While ransomware attacks are becoming
increasingly common, this attack, known as WannaCry, was noted for its speed of
transmission.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-family: Calibri;">Ransomware is generally spread
via email messages that contain infected attachments.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">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.</span></div>
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<span style="font-family: Calibri;">Internally, we teach our team
some basic security protocol, as a means of protecting technology<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhot-kVOx2vqEQPApOPopdosrViypOaAb48UsMf7o3rfC8X0vnSYxjNZgBGCU0WoW3qqypX68Se62ZHVKUP1BfwgQk5i_zD1BURVMwUhQNq1au-OABcy4frXIo3CC5tNqQOrvXqRtFFqUo/s1600/ransomware.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="170" data-original-width="170" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhot-kVOx2vqEQPApOPopdosrViypOaAb48UsMf7o3rfC8X0vnSYxjNZgBGCU0WoW3qqypX68Se62ZHVKUP1BfwgQk5i_zD1BURVMwUhQNq1au-OABcy4frXIo3CC5tNqQOrvXqRtFFqUo/s1600/ransomware.jpg" /></a></td></tr>
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tools and
data.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">First, we have tight filters on
what emails actually get through.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We
review all emails caught by the spam filter, and whitelist only those we
recognize, and want to receive.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Second,
we don’t open any attachments from anyone, including clients and trusted
vendors, unless we were expecting the attachments.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-family: Calibri;">Third, we don’t forward “cute”
emails, regardless of the heart touching story, or cute butterfly/kitten/baby
picture.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">These are often forwards
themselves, and could have picked up any number of viruses in transmission.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-family: Calibri;">Fourth, we don’t automatically
send money to a client, simply because we get an email from them saying “send
money”.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Those emails are currently the
primary means and source of financial fraud, by the schmucks who specialize in
this type of behavior.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">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.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We also confirm by phone call.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This is simple to do, preserves capital, and
avoids grief for all parties involved.</span></div>
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<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8Gji1zlEdrlnuPmZsIFGrbH9ILhICn6L_9_7DFXgDUH7C4UvTVrkUDa8jQUoZeKmFQ2Gcqzd0WVMy3lRgHx04r3VNE_qQUQJb1IDj_h6Jdk2uL7KaTCv9kLHDzlQ9oISorru227JEhG0/s1600/declaration.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="177" data-original-width="273" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8Gji1zlEdrlnuPmZsIFGrbH9ILhICn6L_9_7DFXgDUH7C4UvTVrkUDa8jQUoZeKmFQ2Gcqzd0WVMy3lRgHx04r3VNE_qQUQJb1IDj_h6Jdk2uL7KaTCv9kLHDzlQ9oISorru227JEhG0/s1600/declaration.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: imgarcade.com</td></tr>
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<span style="font-family: Calibri;">Next week, we celebrate
Independence Day, in honor of the signing and adoption of the Declaration of
Independence, in July 1776.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It was
during the summer of 1776 that the thirteen colonies declared themselves a new
and free nation, independent of England and King George.</span></div>
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<span style="font-family: Calibri;">In thinking about our heritage
as a country, and the concept of independence and freedom, several things come
to mind.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">First is that it takes very few
to make a difference. </span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Those few though,
must be resolute in their conviction.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">The signers of the Declaration of Independence pledged their lives,
their fortunes, and their sacred honor.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">A number of them did give their lives and fortunes to the cause of
liberty.</span></div>
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<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-Y1BlJmnybGlUuPT87QVsWS-ehKepiTH_eg7yt4nT4XClVCLWrQr5bsscnoLHzTNaHez_3GhNwK_XJvzoukbBjnhlxVnVQjT-wssKpFXJ9mldopdGthgWoyg2D_pS2A7KUln9_wVRSCQ/s1600/freedom.png" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="154" data-original-width="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-Y1BlJmnybGlUuPT87QVsWS-ehKepiTH_eg7yt4nT4XClVCLWrQr5bsscnoLHzTNaHez_3GhNwK_XJvzoukbBjnhlxVnVQjT-wssKpFXJ9mldopdGthgWoyg2D_pS2A7KUln9_wVRSCQ/s1600/freedom.png" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: quotesgram.com</td></tr>
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<span style="font-family: Calibri;">Another thought is that there
are differing kinds of freedom.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">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.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It can also encompass emotional, mental, and
spiritual freedom, though these are in the realm of personal choice.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">If you are bound in some way, will you choose
to be free?</span></div>
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<span style="font-family: Calibri;">Quote of the week:</span></div>
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<span style="font-family: Calibri;">“Is life so dear, or peace so
sweet, as to be purchased at the price of chains and slavery?</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Forbid it, Almighty God!</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">I know not what course others may take; but
as for me, give me liberty, or give me death.”</span></div>
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<span style="margin: 0px;"><span style="font-family: Calibri;"> P</span></span><span style="font-family: Calibri;">atrick
Henry, St. Johns Church, Richmond, Virginia, March 23, 1775</span></div>
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<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-53971841190224140832017-06-22T04:39:00.002-04:002017-06-22T04:39:55.619-04:00LIVE<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGTvE6nkT3yuu7qgzKxJr1zDQGuHdxZQDNp0Q0BmoRkMio_npjRwK-L88KTwJ3F0LsRsVR5iQMYlhPpQ6GLNadVY0rAJ1RpfABodYy4VJr0hMbMwk0r7zzDt4hiMG3YvYXBAuzUvOIWRw/s1600/1200px-Whole_Foods_Market_logo.svg.png" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="893" data-original-width="1200" height="148" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGTvE6nkT3yuu7qgzKxJr1zDQGuHdxZQDNp0Q0BmoRkMio_npjRwK-L88KTwJ3F0LsRsVR5iQMYlhPpQ6GLNadVY0rAJ1RpfABodYy4VJr0hMbMwk0r7zzDt4hiMG3YvYXBAuzUvOIWRw/s200/1200px-Whole_Foods_Market_logo.svg.png" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: en.wikipedia.org</td></tr>
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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.<o:p></o:p></div>
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Tech stocks sold off last
week, with the NASDAQ closing at 6151, down 2.7% since its high of 6321 on June
8<sup>th</sup>. 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.<o:p></o:p></div>
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhamBBAJqbqWRrr0Xzt23PnW3DfvJ5vY3QcoilWmeIYp4rIETrfoiBZfbDNNGNLyCD9bWQQvPSROZbc9MQ3FdxL-NWHLYDXGHygZXZgNQ5ZQ8ELL-kz_u2uh91QY711H2cUft49lxotLvs/s1600/interest+rates+up.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="194" data-original-width="259" height="149" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhamBBAJqbqWRrr0Xzt23PnW3DfvJ5vY3QcoilWmeIYp4rIETrfoiBZfbDNNGNLyCD9bWQQvPSROZbc9MQ3FdxL-NWHLYDXGHygZXZgNQ5ZQ8ELL-kz_u2uh91QY711H2cUft49lxotLvs/s200/interest+rates+up.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: amppob.com</td></tr>
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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.<o:p></o:p></div>
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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.<o:p></o:p></div>
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhk0tko2A3gSnh57n-vtygaK-meMJYXVsqdQKoA788qxT5HTSWQ9DQkbKdKZ1sByK7fFnvHL6oP87euMtm3KwI-QPkQfbpMj97DoR7EITyMdwPM9at1IQGWZZbxUH6yy-FVmWe3qxc4syk/s1600/cheech+and+chong.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="147" data-original-width="343" height="137" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhk0tko2A3gSnh57n-vtygaK-meMJYXVsqdQKoA788qxT5HTSWQ9DQkbKdKZ1sByK7fFnvHL6oP87euMtm3KwI-QPkQfbpMj97DoR7EITyMdwPM9at1IQGWZZbxUH6yy-FVmWe3qxc4syk/s320/cheech+and+chong.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: tumblr.com</td></tr>
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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. <o:p></o:p></div>
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<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxB-byJZGAUKIiaDLPKOrO6XBpaAIX_2-4w1wClC3hjNjnITIhCUIPjX0E5cMK1exsYZD7QS9GqrkrsyL7Qoa28smlXaG4riWo0ntPjpbTFclB9TTV5tHywGawr76mnyj32GNW9bihwB4/s1600/d+day.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="163" data-original-width="310" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxB-byJZGAUKIiaDLPKOrO6XBpaAIX_2-4w1wClC3hjNjnITIhCUIPjX0E5cMK1exsYZD7QS9GqrkrsyL7Qoa28smlXaG4riWo0ntPjpbTFclB9TTV5tHywGawr76mnyj32GNW9bihwB4/s1600/d+day.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: army.mil</td></tr>
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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 <a href="http://www.ledger-enquirer.com/news/local/article154467324.html">http://www.ledger-enquirer.com/news/local/article154467324.html</a>. One quote stands out. Wooters said “when you know you are going to
die, you are no longer afraid”. <o:p></o:p></div>
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Yes. So, what’s stopping you? And me?
We know we are going to die. Why
not then, fully live?<o:p></o:p></div>
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Quote of the week:<o:p></o:p></div>
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“The only thing we have to
fear is fear itself.”<o:p></o:p></div>
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FDR
Inaugural Address, March 4, 1933<o:p></o:p></div>
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P.S. You can find the entire Inaugural Address, in
either text or audio, at h<a href="http://historymatters.gmu.edu/d/5057">ttp://historymatters.gmu.edu/d/5057</a>. <o:p></o:p></div>
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Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-18741582333097498132017-06-07T18:35:00.002-04:002017-06-07T18:35:50.542-04:00Understood<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmth9LGbUXvsWvlpl6-Axeh69DvRAfQjOCD4aHBYKJ0I6l3Oxgn_dCx-4XMGvdJPvYzCcvHk7IqmGoBgmFBNC7iwr_g9Ns5mnWiOnKFZQiN_jFO7bn-MhyphenhyphengavWRCXqvLBK9FWg2ho_yA0/s1600/100.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="600" data-original-width="800" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmth9LGbUXvsWvlpl6-Axeh69DvRAfQjOCD4aHBYKJ0I6l3Oxgn_dCx-4XMGvdJPvYzCcvHk7IqmGoBgmFBNC7iwr_g9Ns5mnWiOnKFZQiN_jFO7bn-MhyphenhyphengavWRCXqvLBK9FWg2ho_yA0/s320/100.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: londonhollywood.wordpress.com</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
U.S. stock markets closed the 100<sup>th</sup>
trading day of 2017 on May 25<sup>th</sup>, 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 9<sup>th</sup>
year.</div>
<o:p></o:p><br />
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
The DOL fiduciary rule, which
was to have gone into effect on April 10<sup>th</sup>, and whose start date was
delayed until June 9<sup>th</sup>, 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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijMyta8FFBJl9_8aLByJ1e7Ygbng5Skbq9nvn9GjlcV6w0NCVRqtfJVgpG4Q_g4uKN71VlpCGF_J6II_BcIAY-ABY8dtaJ6iSdQ2M2wUY8c6VzqmJM9QtnzIOHQurNTBr4VwqS82W44QQ/s1600/1200px-US-BureauOfEconomicAnalysis-Logo.svg.png" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="452" data-original-width="1200" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijMyta8FFBJl9_8aLByJ1e7Ygbng5Skbq9nvn9GjlcV6w0NCVRqtfJVgpG4Q_g4uKN71VlpCGF_J6II_BcIAY-ABY8dtaJ6iSdQ2M2wUY8c6VzqmJM9QtnzIOHQurNTBr4VwqS82W44QQ/s320/1200px-US-BureauOfEconomicAnalysis-Logo.svg.png" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: wikipedia.com</td></tr>
</tbody></table>
<div class="MsoNoSpacing" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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%.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
The FOMC meets next week, on
the 13<sup>th</sup> and 14<sup>th</sup>.
Expect some announcement regarding interest rates, even if the announcement
is that there will be no change.<o:p></o:p></div>
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<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnr6u_h3cng81HdU9BmqkOwbqF-f5HCqVL-TrlFaj4pC96i4kttth0rP-4dNJJQ9SjLmMsnzaKwLbMaV6syqAtLCLPGTdr6MXf_bvyKG_joGM_WOmlvrfSSmF8aniuOnYT2eTGwEiTtXI/s1600/US-federal-reserve-logo.gif" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="300" data-original-width="300" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnr6u_h3cng81HdU9BmqkOwbqF-f5HCqVL-TrlFaj4pC96i4kttth0rP-4dNJJQ9SjLmMsnzaKwLbMaV6syqAtLCLPGTdr6MXf_bvyKG_joGM_WOmlvrfSSmF8aniuOnYT2eTGwEiTtXI/s320/US-federal-reserve-logo.gif" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: Nevadacounty.com</td></tr>
</tbody></table>
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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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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. <o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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. <o:p></o:p></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUfaOMQK0NCBB-EWU-YHqBNm-dCokl1GC8ES_kCyM2YHReC2_Bhjph9KGd1_70zxI1piGjKIY8U3V7HAj667KudJabno8MkvSIYeK8UHmqbXElrhMwWeZIIPMfYasT35CFctkJP78vneE/s1600/quiet-mouth-clip-art-quiet-clipart-RiGGdLLiL.jpeg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="960" data-original-width="960" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUfaOMQK0NCBB-EWU-YHqBNm-dCokl1GC8ES_kCyM2YHReC2_Bhjph9KGd1_70zxI1piGjKIY8U3V7HAj667KudJabno8MkvSIYeK8UHmqbXElrhMwWeZIIPMfYasT35CFctkJP78vneE/s200/quiet-mouth-clip-art-quiet-clipart-RiGGdLLiL.jpeg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: Clipart Panda</td></tr>
</tbody></table>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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?”<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
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.<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
What can you add to this list,
in the interest of helping all of us improve?<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
Quote of the week:<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
“Every time you make a choice,
you are turning the central part of you into something a little different than
it was before.”<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
C.S.
Lewis<o:p></o:p></div>
<br />
<div class="MsoNormal" style="text-align: justify;">
<o:p> </o:p></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-21956114981223826472017-05-25T05:30:00.000-04:002017-05-25T05:30:02.248-04:00Tiger<div class="MsoNormal" style="text-align: justify;">
According to the World Federation
of Exchanges database, there were about 15,000 publicly traded companies
worldwide, in 1975. This count grew to
just over 43,000 by 2015. What’s
interesting is the change across these 40 years. <o:p></o:p></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioSDC5rzTW1Hoo_zR9BSt2xROCspO7Gz9bbkrVbq9O_NZW9egguNA8ehRtblZpf-YEQkbt4eiXn6abheMaA178mRsx72fevutZNKEOzj5MEtNXb9IzqlmbNlJ_ue96UYBaquEJpqpn6So/s1600/WFE_logo_webready.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="126" data-original-width="480" height="84" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEioSDC5rzTW1Hoo_zR9BSt2xROCspO7Gz9bbkrVbq9O_NZW9egguNA8ehRtblZpf-YEQkbt4eiXn6abheMaA178mRsx72fevutZNKEOzj5MEtNXb9IzqlmbNlJ_ue96UYBaquEJpqpn6So/s320/WFE_logo_webready.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: www.businesswire.com</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
In 1975, according to WFE data,
Australia, Canada, and Japan each had about 1400 publicly traded companies,
with Germany, France and Spain coming in at between 500 and 1000
companies. Over the next 40 years, the
Australia count grew by 44%, while Japan and Canada more than doubled. Germany grew by just 13%, while the France
public company count dropped. The winner
in headcount growth though, is Spain, which went from 940 to 3480 publicly
traded companies, a multiple of almost four over these years.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
We haven’t audited the WFE data,
as posted at worldbank.org, and we question some of the information. However, the trends can be instructive. According to this dataset, South Korea,
Malaysia, Poland, Singapore, and Thailand had no or few public companies in
1975. In 2015, they each had from 650 to
more than 2000 companies whose stock was available for purchase on exchanges.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJWQD60PGknQG-RNrrm_4PpT8Q8uyw2xdUoK7fEgYAWGjcEuTcRsBR5F9FRaPOyCV9_N7J-LuT6uDbXI5CXIZHPQkRdo2_lny9Iyzss4XofG9fpTt6y9rUGzOOpOeOUGkF3JBjFks7lcU/s1600/largest-pubcos-united-states.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1309" data-original-width="1600" height="261" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJWQD60PGknQG-RNrrm_4PpT8Q8uyw2xdUoK7fEgYAWGjcEuTcRsBR5F9FRaPOyCV9_N7J-LuT6uDbXI5CXIZHPQkRdo2_lny9Iyzss4XofG9fpTt6y9rUGzOOpOeOUGkF3JBjFks7lcU/s320/largest-pubcos-united-states.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: www.visualcapitalist.com</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
The story in the U.S. is also
instructive. In 1975, there were about
4500 publicly traded companies. This
number grew to almost 9000 by 1997, and stands today at about 4500. With a generally healthy (though slow
growing) economy, why has the number of publicly traded companies stalled?<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Most observers, of which we are
one, offer three compelling reasons.
First, the cost of going public is substantial, with underwriting and
regulatory costs absorbing as much as 14% of funds raised. So on a $500 million offering, investment
banks and attorneys could absorb as much as $70 million. And, there is significant ongoing regulatory
and administrative expense with a public company.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Second is market volatility. The underlying or intrinsic value of a
company is just one of the components that can drive stock price. The others include, but certainly aren’t
limited to, interest rates and investor sentiment. If I as company founder don’t need the
liquidity, why go through the pain of the price volatility, when the price on
so many days may poorly represent underlying value.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Third is ease of access of
funds. With private equity available to
fund growth or owner exits, options other than a public offering are
attractive. <o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
It would seem that to foster a
healthy public market for stocks, the regulatory and underwriting costs need to
make sense, the ongoing reporting requirements need to work from a cost
standpoint, and the overall costs of maintaining the stock in a public
environment need to compete well with other options available to
ownership. In too many cases, in the
U.S., this isn’t the case.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Looking at the economy across the
world, the Eurozone is hoping for economic growth of 1% annually, while the
U.S. is growing at 2%, and many of us think we can move toward 3% annual
growth. Stateside, unemployment is less
than 5%, which means employers are scraping the bottom of the barrel looking
for those who are employable. Meanwhile,
the Eurozone features unemployment at or near 12%.<o:p></o:p></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvV8WgFCFBAMgxwR8X26Zn9RumfkY34Da0Hmx0iPdHem8V0quj-KFFvImmgZmxjLimaGVnFgLq7FR53SCt6069U1WCzccF27bIdpSBdZupO_8K3fyUcU6YsSyV8yazxASVfY8x7KVr8XA/s1600/220px-Seal_on_United_States_Department_of_the_Treasury_on_the_Building.JPG" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="165" data-original-width="220" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvV8WgFCFBAMgxwR8X26Zn9RumfkY34Da0Hmx0iPdHem8V0quj-KFFvImmgZmxjLimaGVnFgLq7FR53SCt6069U1WCzccF27bIdpSBdZupO_8K3fyUcU6YsSyV8yazxASVfY8x7KVr8XA/s1600/220px-Seal_on_United_States_Department_of_the_Treasury_on_the_Building.JPG" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: wikipedia.com</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
As a result, foreigners are
investing heavily in the U.S. This week,
the Treasury reported net long-<o:p></o:p></div>
term inflows, of international funds, of $59.8
billion in March, and this on top of $53.1 billion in inflows in February. Just $1 billion went to equities, with the
large majority of these funds going to Treasury and corporate bonds.<br />
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Canada and Mexico were the
largest sellers of Treasury bonds, Russia the largest buyer.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Always Dreaming won the Run for
the Roses this year, paying $11.40 on a $2 bet, and landing his owners a
$1,635,800 purse. Always Dreaming got
the glory and the roses, though it wasn’t a one horse show. Also involved were owners Tony Bonomo and
Vince Viola, trainer Todd Pletcher, and jockey John Velazquez. And of course, the generous U.S. tax code.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Code Section 183, which contains
the “hobby loss” rules, says you can deduct business losses against your other
income but…you can’t deduct losses from your hobby against other income. The basic rule that distinguishes business
activity from hobby activity is that you have to enter the activity with an
intent to make a profit. A helpful rule
of thumb is that for most activities, if you make a profit in three out of five
years, you are presumed to be engaging with the intent to make a profit.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhaL-6I9I5A7blPSeWEXnsxGUeTxP4k1Mbw8mSVq42V64DEBQl_PCVTuKACDzUEMlEO1JkI35Mt1fnqdIJ8dDgM3WyvrbmAwbvxrOiSElvMeMCNfGL3KbDkIOriU8eS85XYDaQQryDweoM/s1600/horse-racing-steriods-use.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" data-original-height="300" data-original-width="450" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhaL-6I9I5A7blPSeWEXnsxGUeTxP4k1Mbw8mSVq42V64DEBQl_PCVTuKACDzUEMlEO1JkI35Mt1fnqdIJ8dDgM3WyvrbmAwbvxrOiSElvMeMCNfGL3KbDkIOriU8eS85XYDaQQryDweoM/s320/horse-racing-steriods-use.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: TestCountry.org</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
But, one kind of business gets a
special pass. That business is the one
“which consists in major part of the breeding, training, showing, and racing of
horses”. For these businesses, the rule
of thumb for profitability is two years out of seven. In addition to this relaxed standard,
racehorses are depreciated over three years, compared to a seven year
depreciation for other horses, such as service animals.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Keep in mind that horse racing is
generally a very expensive hobby for those with very large wallets, so we
wouldn’t suggest adding racehorses to your list of alternative
investments. </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
However, a good race can be
fun to watch, and for the owners, those losses can offset what for many is
significant income.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Quote of the week:<o:p></o:p></div>
<div class="MsoNoSpacing">
<br /></div>
<div class="MsoNoSpacing">
“Some people regard private enterprise as a predatory
tiger to be shot. Others look on it as a
cow they can milk. Not enough people see
it as a healthy horse, pulling a sturdy wagon.” <o:p></o:p></div>
<div class="MsoNoSpacing">
</div>
<div class="MsoNoSpacing">
Winston
Churchill<o:p></o:p></div>
<div class="MsoNoSpacing">
<br /></div>
<div class="MsoNoSpacing">
“I’ve often said there’s nothing better for the inside of
a man than the outside of a horse.”<o:p></o:p></div>
<div class="MsoNoSpacing">
</div>
<div class="MsoNoSpacing">
Ronald
Reagan<o:p></o:p></div>
<div class="MsoNoSpacing">
<br /></div>
<h1>
<o:p></o:p></h1>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<br />
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<br /></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-70319191460090315332017-05-17T05:00:00.000-04:002017-05-17T05:00:19.766-04:00Healthcare<div class="MsoNoSpacing" style="text-align: justify;">
Last week, we spoke briefly of
the American Health Care Act, which has been passed by the House. Following are additional details about the
AHCA, as passed by the House. The legislation
would:<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4Hz1fL68fmgkOwG3zRyUgZTiBkOtjcZQdGzM2L-4py2qhaauFnVxjn1jurm9q5VBAbgaM7wA_IW3zvCn1JhrEsIzJBISLusWrj4RJ5naYndaUKVqlLIimbOlIjY56qiK6K9gpAaqGQyM/s1600/american%252Bhealth%252Bcare%252Bact1.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="179" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4Hz1fL68fmgkOwG3zRyUgZTiBkOtjcZQdGzM2L-4py2qhaauFnVxjn1jurm9q5VBAbgaM7wA_IW3zvCn1JhrEsIzJBISLusWrj4RJ5naYndaUKVqlLIimbOlIjY56qiK6K9gpAaqGQyM/s320/american%252Bhealth%252Bcare%252Bact1.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: www.wbay.com</td></tr>
</tbody></table>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 1.<span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><!--[endif]-->Do
away with both the individual and employer mandate, and their associated taxes,<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 2.<span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><!--[endif]-->Do
away with the Medicine Cabinet Tax, which places a tax on medical devices, drug
companies, and health insurers,<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 3.<span style="font-size: xx-small;"> </span>Do
away with the 40% tax on high-cost employer-sponsored group plans, known as the
Cadillac tax,<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 4.<span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span>Shift
Medicaid funding to a fixed amount per year per Medicaid enrollee,<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 5.<span style="font-size: xx-small;"> </span>Give
states the option of receiving Medicaid funding in block grants, rather than
per capita, for certain populations,</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 6.<span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><!--[endif]-->Waive
the Essential Health Benefits requirement, thereby giving states much more latitude,
and control over, what each state considers “required” coverage and benefits,<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 7.<span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><!--[endif]-->Waive
the “community rating” and “mandatory age rating” rules, giving states and
insurers much more flexibility regarding pricing,<o:p></o:p></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 8.<span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><!--[endif]-->Eliminate
income based subsidies, and replace them with age-based tax credits, ranging
from $2000 to $4000 per individual, <o:p></o:p></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -.25in;">
<!--[if !supportLists]--> 9.<span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><!--[endif]-->Eliminate
the tax on FSAs, HSA withdrawals, and the 3.8% surtax on investment income, and
the 0.9% tax for certain high income households.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Overall, this restructuring is a
major step in the right direction, in terms of returning control of health care
financing decisions to the individual, household, and state level where, in our
opinion, they rightfully belong. And, it
returns dollars to the pockets of taxpayers, again, where those dollars
rightfully belong.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWLAHEKqphujFJfW3NduQJDAmyKUzoMXHQ0rr2w4Cw1auF3S6U7nthigUE7_rVJqKQKFZihcyDHbR5EA90wXgwllsbTHvsKogyZEr2lQuUV3rHfT2vGr3pLQTl86lJBKuOQnbFLW5ji3s/s1600/cash+flow.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWLAHEKqphujFJfW3NduQJDAmyKUzoMXHQ0rr2w4Cw1auF3S6U7nthigUE7_rVJqKQKFZihcyDHbR5EA90wXgwllsbTHvsKogyZEr2lQuUV3rHfT2vGr3pLQTl86lJBKuOQnbFLW5ji3s/s1600/cash+flow.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: www.accountingdetails.com</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
For most households, there is a
100% correlation between earned income and cash flow. Cash flow though, can come from several
sources, including earned income, business income, pension income, and
portfolio income. Business income is a
fairly broad category, and can include rents, royalties, and distribution of
profits, among other things. <o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Cash flow can also come from
reimbursed expenses, or funded by corporate expense accounts, in specific
situations, or from debt or equity financing.
Note that financing, whether debt or equity, comes with its own set of
costs and other considerations.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
The business marketplace has an
interesting array of participants.
Traditional business or company owners tend to focus on developing
several types of tax efficient cash flow.
The focus is on cash flow diversification and revenue quality. These provide some level of safety and
security. And done well, there should be
sufficient cash flow, after taxes and lifestyle expenses, to redeploy into
building additional cash flow. Cash flow
from operations, and return on equity, or net dollars invested, are two key
metrics we like to keep an eye on.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Tax efficiency matters. Tax efficiency though, is not just income
taxes. It also includes personal and
real property taxes, and can includes sales and use taxes.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDtzPZmZ6FMxgB2aVRcfmKYePYoNqvt1izAe1bP1re3UvQ-CQWkHDAN4ISG3PNSxTtijp6J_HV7uExUWlEl3B3LcVS9I6mGSEtWyezZqTqaucfhK1o1o0LEWHKZSgynMc-fYeq8ksOxrA/s1600/shareholder-word-cloud.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="231" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDtzPZmZ6FMxgB2aVRcfmKYePYoNqvt1izAe1bP1re3UvQ-CQWkHDAN4ISG3PNSxTtijp6J_HV7uExUWlEl3B3LcVS9I6mGSEtWyezZqTqaucfhK1o1o0LEWHKZSgynMc-fYeq8ksOxrA/s320/shareholder-word-cloud.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: www.bc-llp.com</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
Another group of participants in
the business marketplace are what we can call shareholders. We<o:p></o:p></div>
typically find these in startup companies,
or in disruptive sectors. Over the last
20 to 30 years, the large majority of these shareholders have been in the
technology arena. <br />
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
The goal with shareholders is
not to maximize sources and efficiency of cash flow. The goal of shareholders is to ramp revenue
into eight or nine figures within a short time frame, such as three to seven
years. The purpose of the quick ramp up
in revenue is to achieve a liquidity event, as an exit strategy for
shareholders, and especially founding shareholders. <o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
This sale could be to a larger
company, or through the public markets with an IPO. Whether one or the other is one of several
considerations in preparing for the liquidity event.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Shareholders who experience a
liquidity event can be surprised by the tax implications of the event. And many times, founding shareholders will
take some of the proceeds and repeat the process, building another
company. Like all of us though, at some
point they will be looking for cash flow.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9_A0FG2q1C6rmXOquV4_fAplj_5O5k1lHMfmFuUSHdn5FEepyX2LQ4RzsSLe5WOzYIGy-W4GpBJNKE857HZ0usiRcV7kHML4ltxQK_Ie7tsDdaz_v8XJcaDQYky-LhQ_7J_2ZBssJYd0/s1600/sophie+tucker.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="177" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9_A0FG2q1C6rmXOquV4_fAplj_5O5k1lHMfmFuUSHdn5FEepyX2LQ4RzsSLe5WOzYIGy-W4GpBJNKE857HZ0usiRcV7kHML4ltxQK_Ie7tsDdaz_v8XJcaDQYky-LhQ_7J_2ZBssJYd0/s320/sophie+tucker.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: wordiki.net</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
Quote of the week:<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNoSpacing" style="text-align: justify;">
“From birth to age 18, a girl
needs good parents. From 18 to 35 a girl
needs good looks. From 35 to 55 a girl
needs a good personality. From 55 on, a
girl needs good cash.”<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
Sophie
Tucker<o:p></o:p></div>
<div class="MsoNoSpacing" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<br />
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-32651383076907764382017-05-09T07:00:00.000-04:002017-05-09T07:00:36.140-04:00Essential<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: "Calibri";">Let's talk about something other than taxation of retirement plan distributions, and what constitutes a fiduciary, since those topics have been the focus of the last few weeks of commentaries.</span></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvWaSVNOOTq0WuKufFQgTrIayB1Ivhwl1YeGQe89AlbWJ6dKHakhKpwAGz8o3wb0qNfK65zfhu0ZiSkUgpbaT9z_V9MPP9luYpw9TuzpbfCUBTsuomLKrPmkAaL0rVbohDrTTHpIYGRWA/s1600/nasdaq-index.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvWaSVNOOTq0WuKufFQgTrIayB1Ivhwl1YeGQe89AlbWJ6dKHakhKpwAGz8o3wb0qNfK65zfhu0ZiSkUgpbaT9z_V9MPP9luYpw9TuzpbfCUBTsuomLKrPmkAaL0rVbohDrTTHpIYGRWA/s200/nasdaq-index.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: stocktrader.com</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">The public markets have had a fine year, through Friday's close, whether you are investing stateside or elsewhere.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">The S&P 500 is up 7.2% from the first of the year through Friday May 5</span><sup><span style="font-family: "Calibri"; font-size: 10pt;">th</span></sup><span style="font-family: "Calibri";">, not including dividends, while the NASDAQ Composite is up 13.3%.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">The international markets, whether developed or emerging markets, have also done well, up between 12% and 14%.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">Even bonds have held their own, with long bonds (BLV) up 1.6% and short bonds (BSV) up 0.35%, not including interest paid.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">As we have discussed at other times, it is time for international markets to have a good year, and for this we are grateful.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Domestic equity markets appear to be driven by lack of other opportunity, corporate earnings, and anticipation of good things to come, in the way of tax and health care reform.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">Overall, earnings reports have been good during this quarterly reporting season, though there have been a few challenges.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Just ask IBM.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhS8aMx-GXagm50uh_zaTFDPeMFwz8r3yOdfFlIomSUGM0JasqCsEmMTUFKV-_5qr_XpHRyi5L4QCw-Ki143vi7MAwWa4H2I4-30XmXCrHoPJdJRUOYljHw-nx90wjmLN8RGvcQQgThxYc/s1600/ibm-logo.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhS8aMx-GXagm50uh_zaTFDPeMFwz8r3yOdfFlIomSUGM0JasqCsEmMTUFKV-_5qr_XpHRyi5L4QCw-Ki143vi7MAwWa4H2I4-30XmXCrHoPJdJRUOYljHw-nx90wjmLN8RGvcQQgThxYc/s200/ibm-logo.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: forbes.com</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">IBM created Watson, one of the early AI developments.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Unfortunately for Big Blue, they have yet to fully capitalize on this achievement, with revenue continuing to decline, as they fight for AI and cloud dominance against one-time (and now fully established) upstarts such as Alphabet and Amazon, among others.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">IBM continues its attempts to turn the ship and rebuild revenue, which has dropped from $105 billion in 2011, when Watson won Jeopardy, to $89 billion in 2016.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">In the meantime, Moody's downgraded IBM's debt on Wednesday, to A1 from Aa3.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">And, at the Omaha business lovefest, known as the Berkshire Hathaway annual meeting, Buffet said he'd made a bad call on IBM and announced he'd sold 30 million shares since the first of the year, roughly one third of his position. </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">Speaking of health care reform, an amended version of the American Health Care Act has passed the House of Representatives.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Given the need to get this legislation through the Senate, we won't spend much time on it here.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">The short version is that the legislation, which made it through the House, would eliminate the current mix of "essential health benefits", handing back to the states the responsibility of determining "mandated" benefits.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">This would apply to both group and individual coverage.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">The current version would also do away with "community" premium rates, once again permitting individual underwriting.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">It would also allow a multiple of 5 instead of 3, in the premium price spread between the younger and older insureds.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">The proposed legislation would also do away with the 3.8% surcharge on net investment income, and the 0.9% surcharge on earned income, for certain high income tax payers.</span><span style="margin: 0px;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiit5zBsANOx2HZWinga2Ysr4iAKvhsstHNhx2J1A5_0YLjsQpTqCKQ3p0lNe1AmziNXcaULZJ3y4KPheyrdpf7BdsBM0ZFlNucEQLNev3QZ3FksK9CKJJ-2F89zQ5-bLtPQmFmFCk0CAY/s1600/american-non-farm-payrolls-650x400-650x400.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="122" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiit5zBsANOx2HZWinga2Ysr4iAKvhsstHNhx2J1A5_0YLjsQpTqCKQ3p0lNe1AmziNXcaULZJ3y4KPheyrdpf7BdsBM0ZFlNucEQLNev3QZ3FksK9CKJJ-2F89zQ5-bLtPQmFmFCk0CAY/s200/american-non-farm-payrolls-650x400-650x400.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: daytraderguide.com</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">On the economic front, the Bureau of Labor Statistics has announced 211,000 new additions to non-farm payroll for April, with the official unemployment rate holding steady at 4.4%.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">The employment gains were in leisure and hospitality, health care and social services, financial activities, and mining.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">You can read the full release at </span><a alt="https://www.bls.gov/news.release/empsit.nr0.htm" href="https://www.bls.gov/news.release/empsit.nr0.htm" shape="rect" target="_blank"><span style="color: #0563c1; font-family: "Calibri";">https://www.bls.gov/news.release/empsit.nr0.htm</span></a><span style="font-family: "Calibri";">.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">It's easy to find bad news.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Turn on any "news" channel, or logon to any "news" site, and you can get your fill of what's wrong with anything.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">Some good news?</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Check out the charts at </span><a alt="https://ourworldindata.org/" href="https://ourworldindata.org/" shape="rect" target="_blank"><span style="color: #0563c1; font-family: "Calibri";">https://ourworldindata.org/</span></a><span style="font-family: "Calibri";">.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Max Roser has done a yeoman's job compiling some fascinating information, for our edification.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Some highlights include:</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">In 1820, 84% of the world population lived in extreme poverty.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Today, that number is less than 10%.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">In 1800, only about 10% of the world population could read.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Today, more than 84% can read.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Today, more than half the world population lives in a democratic society, where the individual gets a vote, up from nearly zero 200 years ago.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Currently, virtually no one lives in colonies, and closed autocracies are becoming scarce.<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiL5OnX1EgnKh5lXQbAunlrvn_wsvuN8SX8WMoE9jKAyzPFXI3QVKR5SikxNH6ARY70-tp0Ev3B45AXlXcebMV__hTBSrdB1QqVsiYLKZGJdGJ6H34j1p-vcIaUpqLUJDOJrwnVcNUG1A0/s1600/literate-and-illiterate-world-population.png" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiL5OnX1EgnKh5lXQbAunlrvn_wsvuN8SX8WMoE9jKAyzPFXI3QVKR5SikxNH6ARY70-tp0Ev3B45AXlXcebMV__hTBSrdB1QqVsiYLKZGJdGJ6H34j1p-vcIaUpqLUJDOJrwnVcNUG1A0/s320/literate-and-illiterate-world-population.png" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Graph Credit: ourworldindata.org</td></tr>
</tbody></table>
</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">So that concept articulated as natural law, the freedom of the individual to control his/her own person, and thinking?</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">And that those who govern do so only with the express consent of the governed? It has worked, and spread.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Not perfectly, but for vast majorities of the world population, this world is a much better place than it was for their parents, grandparents, and the generations before them.</span><span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Hats off to those who have fought and died for these ideals.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Calibri";">"Those who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"> </span><span style="font-family: "Calibri";">Benjamin Franklin</span></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-55061349087350442942017-05-03T05:00:00.000-04:002017-05-03T05:00:14.021-04:00HANDS
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">You have probably heard by now that the new DoL fiduciary
rule, slated to go into effect on Monday April 10</span><sup><span style="font-family: Calibri; font-size: x-small;">th</span></sup><span style="font-family: Calibri;">, has had
implementation pushed back to June 9</span><sup><span style="font-family: Calibri; font-size: x-small;">th</span></sup><span style="font-family: Calibri;">.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The short version of this rule is that it
requires any advisor who oversees IRA money on behalf of clients to function in
a fiduciary role.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The rule has been
especially disturbing to the brokerage and annuity industry.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhw6j9V-7Nv1yZf9yqt52WiatgxKWWvqH_WAJWMg__s22jaza1UvbTUvU5hjeDUrBnL9dwKnPNiPvpDcvkH0opzj8VPasEEsi02hYl7yK1d5272__0w2vxpu6BwB2Deh2j43hWIcqC7MhY/s1600/piggybank-illustration-design-over-white-background-34501460.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="178" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhw6j9V-7Nv1yZf9yqt52WiatgxKWWvqH_WAJWMg__s22jaza1UvbTUvU5hjeDUrBnL9dwKnPNiPvpDcvkH0opzj8VPasEEsi02hYl7yK1d5272__0w2vxpu6BwB2Deh2j43hWIcqC7MhY/s200/piggybank-illustration-design-over-white-background-34501460.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: dreamstime.com</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">To the financial profession however, this ruling is long
overdue.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The rule brings to bear on the
retail side, guidelines similar to those which have been in place for many
years for those who interact with employer sponsored retirement plans.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">And of course the most common employer
sponsored retirement plan is the 401(k) plan.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">The Employee Retirement Income Security Act of 1974 (ERISA),
as amended with TRA ’86, and other legislation, is the primary governing
legislation when it comes to how retirement plans function.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The Department of Labor (DoL), through its
Employee Benefit Security Administration, is responsible for generating regulations
which interpret the legislation.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">ERISA defines several types of fiduciaries, and DoL and the
EBSA continue to interpret these definitions.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">DoL and the EBSA continue to encourage plan sponsors, and those who make
decisions on behalf of plan sponsors, to assure that the plan is managed
exclusively for the benefit of participants and their beneficiaries, and that
the plan is managed with a prudent, documented, process.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">ERISA identifies three broad categories of fiduciaries who
may interact with retirement plans.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">They
are defined in Sections 3(16), 3(21), and 3(38).</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgO0-BukmsIqFseafh4RvHDFdHJN6TdvOE4oQp0T2FUZPoG5llVDPc2jZgqnPPloaAx6v9cc_41_suOCMv9fndhdFEb8GP1lpWFME25ZzfGwTBhD_yRkzL5hALqJZMkHydis1b4kHCsFaU/s1600/fiduciary.png" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="125" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgO0-BukmsIqFseafh4RvHDFdHJN6TdvOE4oQp0T2FUZPoG5llVDPc2jZgqnPPloaAx6v9cc_41_suOCMv9fndhdFEb8GP1lpWFME25ZzfGwTBhD_yRkzL5hALqJZMkHydis1b4kHCsFaU/s200/fiduciary.png" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: forpurposelaw.com</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">A 3(16) fiduciary acts as the plan administrator.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">These administrative functions are varied and
many, though they fall into the broad categories of maintaining and
interpreting the plan document, providing all required disclosures to
participants, providing benefit statements to participants, complying with all
government reporting, ensuring timely deposits of participant contributions,
and overseeing the plan investment menu.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Some specialty firms within the 401(k) service universe
would purport that they could or can provide all these services, therefore
relieving the employer of some or all fiduciary liability.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Whether the employer/plan sponsor chooses to
outsource some of these administrative services or not, it is our professional
opinion that no service provider, regardless of what they propose, can shift
all fiduciary liability away from the plan sponsor, and the executives that act
on behalf of the plan sponsor.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">We seldom suggest that a plan sponsor pay a separate fee for
3(16) fiduciary services, as we remain unconvinced that this offers any real
handoff of fiduciary responsibility.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Section 3(21) has a broad definition and a narrow
definition.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The broad definition of Sec
3(21) says that anyone who offers guidance or input to the 401(k) plan, or has
decision making authority relative to the plan, is considered a fiduciary.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This would and could include owners and
officers of the plan sponsor, members of the investment committee, financial
advisors and consultants, institutions who oversee compliance and some
administrative functions, and legal counsel, among others.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgjuDcmItZEt_ggSx9eqsqgrHe6OM3eHzyWizsIJ-OYqJeTSGOVJnLdEZS7hgZChJ49l_GEJ7t-fZNtqEmZHx94pRJfHdguqRUN5fJhH_ovqzSgjZyrfcoihzDGhNIV0P0rSArI_vMefAw/s1600/rules+and+regulations.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="185" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgjuDcmItZEt_ggSx9eqsqgrHe6OM3eHzyWizsIJ-OYqJeTSGOVJnLdEZS7hgZChJ49l_GEJ7t-fZNtqEmZHx94pRJfHdguqRUN5fJhH_ovqzSgjZyrfcoihzDGhNIV0P0rSArI_vMefAw/s200/rules+and+regulations.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: 401kspecialistmag.com</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">The financial institutions/asset managers in the marketplace
who offer 3(21) services do not and almost always will not use this broad
definition, nor do they mean to imply this broad definition, in their service
offerings, or the language which defines these service offerings.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">The narrow definition of 3(21), which almost all financial
institutions and asset managers use, applies to investment selection.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The narrow definition of 3(21) says that the
financial institution will make recommendations about which funds are
appropriate, though plan trustees, or the investment committee charged with
this responsibility, have the final decision.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">This is often referred to as non-discretionary authority, as the 3(21)
fiduciary makes recommendations, but does not make the final fund or investment
selection.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">It is common for the insurance based providers to offer the
narrow definition of 3(21) services, and less common for the asset managers or
mutual fund shops to offer the narrow definition 3(21) services. </span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Then, we come to what’s called a 3(38) fiduciary.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">A 3(38) fiduciary makes decisions on which
funds to use.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The 3(38) fiduciary doesn't
go to the plan sponsor investment committee for approval.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">They make the decision on which funds to use,
and replace them as they see fit.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This
is often referred to as discretionary authority. </span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">However, a 3(21) or a 3(38) fiduciary can offer services to
different entities.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">These fiduciary
services can be offered at the platform, the plan, the portfolio, or the
participant level.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This is a part of the
fiduciary offering which can be confusing to plan sponsor decision makers, as ascertaining
what is actually being offered isn’t easy.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMWCLQMggc5OR-d0mY-UmiyrtVCVrNM1s90v4PM0M5kh91twHNWSLsL0AAlqvOuvBWcH6k303iqON4DY2zxyde6O2Sgvt2HLbOFj7tNQ9r1VJbwuAgJxKW3f3ocB6zWxZZ_Ff7pRJKmw0/s1600/fund.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="207" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMWCLQMggc5OR-d0mY-UmiyrtVCVrNM1s90v4PM0M5kh91twHNWSLsL0AAlqvOuvBWcH6k303iqON4DY2zxyde6O2Sgvt2HLbOFj7tNQ9r1VJbwuAgJxKW3f3ocB6zWxZZ_Ff7pRJKmw0/s320/fund.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: investopdia.com</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">We have noticed that some vendors offer 3(38) services.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">When reading the detail, we find that what
they are offering is to approve and select that large group of funds which are
available on their platform.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This is the
large body of funds which are approved for all plans offered by the financial
institution, and which are appropriate for any plans served by this institution.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This is the most common level of 3(38)
fiduciary services, and the one which comes with the least risk to the
organization offering the service.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It is
often provided at no additional cost, over what is already being paid for the
existing service suite.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">A second level of 3(38) services is deciding, for the plan
sponsor, which funds will be used for their specific plan.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This is a less common form of 3(38)
service.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">When it is offered or
available, it is typically available for an additional charge or cost.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">A third level of 3(38) services is at the portfolio
level.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Many plans offer either age-based
or risk based portfolios, as the majority of participants find this the
simplest way to participate in the plan.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">It is our belief that any financial institution which offers age or
risk-based portfolios, and also chooses which funds and allocations are
appropriate for those portfolios, serves as a 3(38) fiduciary at the portfolio
level.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">A fourth level of 3(38) services is at the participant
level.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">There are firms which specialize
in custom built portfolios for participants.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">These generally require a separate acknowledgement or agreement by the
participant, of the services being offered.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">And participants pay separately for these services, typically some
percentage of their plan assets, if they choose to use this service.</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEht5GguRkBOoFMAcvt17c-PSefjgPLLquXP0t2-4mzwUkrHIhzqs_c5Zt4oLN0fHf6tw_LeDxH2MR0LqpurAXJ8LcgTLZER6EjWoCceB9ObcP4g6UVZAapXzuv2NaC6NQRWiCRqig8MJJ8/s1600/investment-funds.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="158" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEht5GguRkBOoFMAcvt17c-PSefjgPLLquXP0t2-4mzwUkrHIhzqs_c5Zt4oLN0fHf6tw_LeDxH2MR0LqpurAXJ8LcgTLZER6EjWoCceB9ObcP4g6UVZAapXzuv2NaC6NQRWiCRqig8MJJ8/s200/investment-funds.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: xx-small;">Picture credit: financeandbusinesstips.com</span></td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Quote of the week:</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">“When money realizes that it is in good hands, it wants to
stay and multiply in those hands.”</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Idowu
Koyenikan</span></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-88419939608165507072017-04-25T06:00:00.000-04:002017-04-25T06:00:22.641-04:00MUSCLE<div class="MsoNormal" style="text-align: justify;">
From time to time we get
questions about the tax implications of taking funds from the different types
of IRAs. Regular IRAs and Roth IRAs have
differing distribution rules. Following
is a short summary.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBxwzaFXS1uj488ATLDCeooyldohJaMkD_9aCjHEMiMPgouXV55eCJ8kYA_DF9zqrxMY1OaLk2LC2SHU4iHTEvsyEPzu4kktEeZHs_Fs3PNI2gCCAMo_x1k3Png-mz7khuIq4ePcTN0NY/s1600/Roth-IRA-Rules.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBxwzaFXS1uj488ATLDCeooyldohJaMkD_9aCjHEMiMPgouXV55eCJ8kYA_DF9zqrxMY1OaLk2LC2SHU4iHTEvsyEPzu4kktEeZHs_Fs3PNI2gCCAMo_x1k3Png-mz7khuIq4ePcTN0NY/s1600/Roth-IRA-Rules.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: novelinvestor.com</td></tr>
</tbody></table>
For Roth IRAs, contributions can
be withdrawn at any time, tax and penalty free. However, a different standard
applies to investment earnings. For earnings
in a Roth IRA, there is a five-year rule, which states you must hold the
account for five years before a withdrawal of your investment earnings is
considered qualified. Otherwise, you
will pay taxes plus a 10% penalty on the earnings portion of the
distribution. In addition to the
five-year rule, to be considered qualified, a withdrawal that includes earnings
must meet one of the following conditions:<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo1; text-align: justify; text-indent: -.25in;">
</div>
<ul>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -0.25in;">Use the withdrawal (up to a $10,000 lifetime
maximum) to pay for a first-time home purchase.</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -0.25in;">Use the withdrawal to pay for qualified
education expenses.</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -0.25in;">Be at least age 59 ½.</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-align: justify; text-indent: -0.25in;">Become disabled or pass away.</span></li>
<li><span style="text-align: justify; text-indent: -0.25in;">Use the withdrawal to pay unreimbursed medical
expenses or health insurance if you’re unemployed (additional rules apply).</span></li>
<li><span style="text-align: justify; text-indent: -0.25in;">The distribution is made in a series of substantially
equal periodic payments (‘SSEPP’), which locks you into taking at least one
distribution per year for at least five years or until you turn 59 1/2,
whichever comes last.</span> </li>
</ul>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
For IRAs that fall under
traditional IRA rules, withdrawals taken before age 59 ½ will be taxed and
<o:p></o:p></div>
penalized 10%. While you can’t avoid
taxes on the traditional deductible IRA distribution, there are exceptions that
would waive the early withdrawal penalty.
The list of exceptions are as follows:<br />
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAnMVOx1NVvAqAUEeWH-htAxys78MIMXpEfXaQmPEYqOUE0tnuRDl2je0kbmGCk-tJJip2sq4dMqpbB4jRvGtQa8RtYrCb2Tatiac0ULY2iQEr1EbiQyMdBaJCq5IdXrX7qt45rCLxgYA/s1600/retirement-roadsign-tradition-vs-roth1.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAnMVOx1NVvAqAUEeWH-htAxys78MIMXpEfXaQmPEYqOUE0tnuRDl2je0kbmGCk-tJJip2sq4dMqpbB4jRvGtQa8RtYrCb2Tatiac0ULY2iQEr1EbiQyMdBaJCq5IdXrX7qt45rCLxgYA/s1600/retirement-roadsign-tradition-vs-roth1.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: nextgenerationtrust.com</td></tr>
</tbody></table>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<ul>
<li>Use the withdrawal (up to a $10,000 lifetime
maximum) to pay for a first-time home purchase.</li>
<li>Use the withdrawal to pay for qualified
education expenses.</li>
<li>Be at least age 59 ½.</li>
<li>Become disabled or pass away.</li>
<li>Use the withdrawal to pay unreimbursed medical
expenses or health insurance if you’re unemployed (additional rules apply).</li>
<li>The distribution is made in a series of
substantially equal periodic payments (‘SSEPP’), which locks you into taking at
least one distribution per year for at least five years or until you turn 59
1/2, whichever comes last. <o:p> </o:p> </li>
</ul>
<br />
<div class="MsoNormal" style="text-align: justify;">
For SSEPP distributions which deviate
from the distribution schedule before the appropriate amount of time has
passed, the tax penalty can be imposed on all amounts withdrawn up to that
point. The amount of the distributions must be based on an IRS approved
calculation that involves your life expectancy, your account balance, and
interest rates. There are three options
to calculate your specified withdrawal schedule, and they are required minimum
distributions, amortization, or annuitization.
<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 24.0pt; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
You can take the substantially
equal payments on a monthly basis. The
monthly payment under the RMD method would be the annual calculated amount
divided by 12. Under the amortization
and annuity methods, the choice of having the payment made monthly should be
part of the original calculation.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiH9x_oFoI7n1ZbcsVAgnmay_jLC8VBvmGUrA55MxO0DIcOGb8zCNiX1ogBTKFk40i6CxmSlig85eqsXKtg4GfRsNn-C2__kFCg6Pn0tpr5YD-Q764zPpsBClyKi36j8ZHUEvigWsTHpM8/s1600/2017-Dodge-Challenger-RT-Scat-Pack-front-three-quarter-660x440.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiH9x_oFoI7n1ZbcsVAgnmay_jLC8VBvmGUrA55MxO0DIcOGb8zCNiX1ogBTKFk40i6CxmSlig85eqsXKtg4GfRsNn-C2__kFCg6Pn0tpr5YD-Q764zPpsBClyKi36j8ZHUEvigWsTHpM8/s320/2017-Dodge-Challenger-RT-Scat-Pack-front-three-quarter-660x440.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: automobilemag.com</td></tr>
</tbody></table>
Now, to a lighter subject. The 2018 Dodge Challenger SRT Demon may be
one of the most well-muscled muscle cars to ever come out of Detroit. It made its debut at the New York Auto Show
recently, to a rousing reception. The
car features 840 horses, the ability to lift its front wheels off the ground,
and just one seat – for the driver. The
waiting list for one already exceeds the 3000 cars Dodge plans to build. You can read more at http://www.pressreader.com/usa/usa-today-us-edition/20170412/281741269284235.<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Dodge, unlike competitors who
have focused on fuel efficient alternative or hybrid vehicles, has built a
stable of top drawer muscle machines, including the Challenger, Charger, and
Viper. Say what you will about the state
of the American auto industry, but they rule both the muscle car category and
the land yacht category, both, to my mind, uniquely American.<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 24.0pt; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Quote of the week:<o:p></o:p></div>
<div class="MsoNormal" style="margin-left: 24.0pt; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
“The hardest thing in the world
to understand is the income tax.”<o:p></o:p></div>
<div class="MsoNormal" style="text-align: justify;">
Albert
Einstein <o:p></o:p></div>
<br />
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-74954866861898700142017-04-20T22:56:00.001-04:002017-04-20T22:56:16.067-04:00KEYS
<br />
<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: calibri;"><br /></span></div>
<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: calibri;"><br /></span></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicR_llG_aWFpu6YWJ1n5SUkN4QJLp-1NlUV-Wx_-yofmOZ2peJ1DSLywSRd4oUqShdvhnqKjLohMAB961iJQyLMsRJCF9rlJw81fo_aJ2MF-lyrwTamQ2XQqnhcmigTOJ_61DYM77mKII/s1600/keys-of-life-vectors.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="140" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicR_llG_aWFpu6YWJ1n5SUkN4QJLp-1NlUV-Wx_-yofmOZ2peJ1DSLywSRd4oUqShdvhnqKjLohMAB961iJQyLMsRJCF9rlJw81fo_aJ2MF-lyrwTamQ2XQqnhcmigTOJ_61DYM77mKII/s200/keys-of-life-vectors.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: vecteezy.com</td></tr>
</tbody></table>
<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: calibri;">Two things to note first this
week, which are taxes and politics.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: calibri;">First, the tax filing deadline
for federal income taxes is April 18</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Typically it would be Monday April 17</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">,
since the 15</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;"> falls on Saturday this year.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">However, the 17</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;"> is a holiday in
the DC area, so this year, your tax filing deadline is Tuesday April 18</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">You can file an extension, of course, and many do, using
Form 4868.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">This gives you the option of
filing at any time within the next six months, with the final filing deadline
for 2016 being on October 16</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">, 2017.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Note that an extension of time to file is not
an extension of a time to pay.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">If you
have a balance due the IRS, you must pay that by the 18</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">The second item is the special
election for Georgia Congressional District 6.</span><span style="margin: 0px;"><span style="font-family: calibri;">
</span></span><span style="font-family: calibri;">Tom Price, former representative from District 6, has been appointed as
Health and Human Services Secretary, in the Trump administration.</span></div>
<span style="font-family: calibri;"><div style="margin: 0px; text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuVp1fN2s0l2t5naVg8Gkirve1ILQj2mYK_4WfLfp4ZYWBaIJDlNe3yzPhzgENPQGfZdQhdEFAtz2cWhqM2o6mjCGse7DVunA0vBJFXkjHzVM4Y06SR8moP26NRAiz6s7Ei_1OzOcZFEM/s1600/Georgia_6th_Congressional_District_Map.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="163" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjuVp1fN2s0l2t5naVg8Gkirve1ILQj2mYK_4WfLfp4ZYWBaIJDlNe3yzPhzgENPQGfZdQhdEFAtz2cWhqM2o6mjCGse7DVunA0vBJFXkjHzVM4Y06SR8moP26NRAiz6s7Ei_1OzOcZFEM/s200/Georgia_6th_Congressional_District_Map.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: dailykos.com</td></tr>
</tbody></table>
</div>
</span><div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">The special election is being
held Tuesday, April 18</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">The
field includes eleven Republicans, five Democrats, and two Independents.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">If you live in District 6, we encourage you
to vote.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">It would be nice if the
potential representatives were subject to the same rules the voters are,
meaning they must live in the district in order to be a candidate to represent
the district.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">That’s not the case in
Georgia.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">Speaking of politics, let me
offer some clarity.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">The United States of
America is not, nor has it ever been, a democracy.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">It is a representative republic.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Of the available forms of governance, a representative
republic is probably the least obnoxious for the majority.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">That is of course, until the populace
discovers, as Cicero, Jefferson, and others have noted, that they can vote
themselves benefits from the Treasury.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiKAovFQ0NIJd9_v8jEJ00XUdhbVEDc5-fvCsYQIuRQthMiQky-9YuxDWGujCzHGC18qopvq02Ihw70rgzAytYfOOjXaiiQdC7fTjO21zJQf0eKDnYgnmXzNwbLzKH8uJZudbqSxGpvE1I/s1600/investing-blog-double-down-your-ira-contributions.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="170" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiKAovFQ0NIJd9_v8jEJ00XUdhbVEDc5-fvCsYQIuRQthMiQky-9YuxDWGujCzHGC18qopvq02Ihw70rgzAytYfOOjXaiiQdC7fTjO21zJQf0eKDnYgnmXzNwbLzKH8uJZudbqSxGpvE1I/s320/investing-blog-double-down-your-ira-contributions.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: bankrate.com</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">Speaking of tax deadlines, a
couple of additional notes.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">If you have
an interest in making IRA contributions, whether deductible, non-deductible, or
Roth, you may make those until April 18</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">, provided you qualify, unless
you have already filed your return.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">The
contribution limit is $5500 per person.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">IRA
contributions require you to have earned income, and there are limits on the
types of IRA contributions you can make, based on income, and your access to
other retirement plans.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">For those of you
age 50 and older in 2016, you get a bonus.</span><span style="margin: 0px;"><span style="font-family: calibri;">
</span></span><span style="font-family: calibri;">You can contribute up to $6500.</span></div>
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</div>
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<br /></div>
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</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">If you are an employer, and
have in mind making some type of employer contribution to a retirement plan,
you have until the earlier of the time you file your corporate return,
including extensions, or September 15</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">, 2017, which is the final
return filing deadline for corporate returns.</span><span style="margin: 0px;"><span style="font-family: calibri;">
</span></span><span style="font-family: calibri;">Employer contributions are typically SEP IRA contributions, or match,
discretionary, or profit-sharing contributions tied to a 401(k) plan, or
defined benefit or cash balance contributions.</span></div>
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<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj64PMfqfWz5pDhms49n9JP-EceZuVi1Jz9YLf1yuyuZnYmUCAUiwBBfCZ0aIKG1ohPPG0Z_OxpajJsnzbT9ycH0VRzU4noNya1IKQWGdA3OZ2FpHNTsNTAXCUSPHRxAaZ9WDcb-YhejXU/s1600/production-free-clipart-1.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj64PMfqfWz5pDhms49n9JP-EceZuVi1Jz9YLf1yuyuZnYmUCAUiwBBfCZ0aIKG1ohPPG0Z_OxpajJsnzbT9ycH0VRzU4noNya1IKQWGdA3OZ2FpHNTsNTAXCUSPHRxAaZ9WDcb-YhejXU/s320/production-free-clipart-1.jpg" width="299" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: worldartsme.com</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">On the economic front, the
recent jobs report showed the U.S. adding just 98,000 new jobs in March,
roughly half analysts’ estimates.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">In
spite of this, the official unemployment rate dipped to 4.5% in March, from 4.7%
in February.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">Digging into the jobs report a
bit, we see that 28,000 jobs were added in manufacturing, and 70,000 were added
in services.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Average hourly earnings
were up 0.2% for March, and are up 2.7% in the last twelve months.</span></div>
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</div>
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<br /></div>
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</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">Most Americans have access to
terrific health care.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">The challenges
with health care in America revolves around two issues.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">One is financing, as in who is going to pay
for it?</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">The other is the delivery of top
quality care to those Americans in rural or isolated areas.</span></div>
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</div>
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<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigfYJB_vp7YyYZ3cbYn7zq65ul0Vs1Xr0HR7TPhdV79QeyCFSKOfnRoB0bcs0PR2Inpk3uN01vh_sfc8LGfNS-haZ-3MLyrELbOlaqZEdP73zi4qBEGydFsAxquVRjGdApX_LqrHzN6Ko/s1600/StrokeWarningSigns.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigfYJB_vp7YyYZ3cbYn7zq65ul0Vs1Xr0HR7TPhdV79QeyCFSKOfnRoB0bcs0PR2Inpk3uN01vh_sfc8LGfNS-haZ-3MLyrELbOlaqZEdP73zi4qBEGydFsAxquVRjGdApX_LqrHzN6Ko/s200/StrokeWarningSigns.jpg" width="162" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: mygenesismedical.com</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">Stroke victims have about a
three hour window during which they can receive tPA (tissue plasminogen
activator), a clot-busting treatment.</span><span style="margin: 0px;"><span style="font-family: calibri;">
</span></span><span style="font-family: calibri;">The tPA treatment is highly effective in treating strokes but, in order
to prescribe it, neurologists must view a CT scan to confirm blockage to the
brain.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Many stroke victims in rural
areas are beyond the three hour window by the time they visit their local
hospital, and are then transferred to a larger hospital with the staff and
technology to properly evaluate their condition, and prescribe treatment.</span></div>
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</div>
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<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">Five specialists from Augusta
University, formerly Medical College of Georgia, including Grant Kohler and Dr.
David Hess, were determined to make lifesaving changes which would allow faster
diagnosis and treatment for rural stroke patients.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">In 2003, they launched REACH, one of the
nation’s first telestroke programs, which allowed MCG neurologists to connect
with eight hospitals in East Central Georgia via fairly primitive audio and
video hardware.</span></div>
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</div>
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</div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmuMYe3JZFm8kPa5c5N8QymHzcd4sc4nY89qwdVPIXCUR8k__XN3b4FyYpz9EDK9OO7THz73AeR_qsPs1CtqyzWGPClxyXIl7j8d5TT6dasdYwIZupJlTU0yf_A7Yli_i5mwTS2MOZzCs/s1600/augusta.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmuMYe3JZFm8kPa5c5N8QymHzcd4sc4nY89qwdVPIXCUR8k__XN3b4FyYpz9EDK9OO7THz73AeR_qsPs1CtqyzWGPClxyXIl7j8d5TT6dasdYwIZupJlTU0yf_A7Yli_i5mwTS2MOZzCs/s200/augusta.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: chronicle.augusta.com</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">The technology worked, and has
continued to improve, saving lives and improving outcomes.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Due to demand, Kohler and Hess have
commercialized the concept, as REACH Health, and it is making a difference
across the country.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">You can read the
entire article in Georgia Trend, at </span><a href="http://www.georgiatrend.com/April-2017/Trendsetters-Reaching-Rural-Patients/"><span style="color: #0563c1; font-family: calibri;">http://www.georgiatrend.com/April-2017/Trendsetters-Reaching-Rural-Patients/</span></a><span style="font-family: calibri;">.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span></div>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">Quote of the week:</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">“Giving money and power to
government is like giving whisky and car keys to teenage boys.”</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">P.J.
O’Rourke </span></div>
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</div>
<div style="margin: 0px 0px 11px; text-align: justify;">
<br /></div>
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-36591545333423907202017-04-11T09:40:00.004-04:002017-04-11T09:40:42.709-04:00Hallmark<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMjie4YkMUXQwJztCQatr0UnGTDFvE9sgxp_aB1w3ihrrY0OcHpZbYBI7rbzwVn1nfG2DqOVW1p42RIsZXJwJrsDQycCA_Y7rJs91djMhAoc_TyY4v6bNilVkz01WvS1kyptaOLVLVv7I/s1600/from+articles.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="119" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMjie4YkMUXQwJztCQatr0UnGTDFvE9sgxp_aB1w3ihrrY0OcHpZbYBI7rbzwVn1nfG2DqOVW1p42RIsZXJwJrsDQycCA_Y7rJs91djMhAoc_TyY4v6bNilVkz01WvS1kyptaOLVLVv7I/s320/from+articles.jpg" width="320" /></a></div>
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<span style="font-family: calibri;"><br /></span></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOx2VcOMWHIqkT6dwDapcXV5eZHtrZ58xLbLseOi4GvdN-LqKNWG6aM9xC7PdqRBx2GaD_pFYbAMON9YI7t843icU4C-d1vjVbbxS9YJY6IZFm3VLCa9uOGxWuq3I5b3nRduAM0q7_9jo/s1600/us-deptoflabor.png" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOx2VcOMWHIqkT6dwDapcXV5eZHtrZ58xLbLseOi4GvdN-LqKNWG6aM9xC7PdqRBx2GaD_pFYbAMON9YI7t843icU4C-d1vjVbbxS9YJY6IZFm3VLCa9uOGxWuq3I5b3nRduAM0q7_9jo/s200/us-deptoflabor.png" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: <span class="webAns" data-type="domain" id="att_url"><span style="color: #001ba0;">blog.wvco.com</span></span></td></tr>
</tbody></table>
<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: calibri;">On April 6, 2016, the Department
of Labor (DoL) issued its fiduciary rule, which we consider a major step
forward for the world of professional financial advice.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">The rule states that brokers can no longer
earn commissions and other forms of conflicted advice compensation from
consumers, unless they agree to do so pursuant to a Best Interests Contract
(BIC) agreement with the client.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">This
BIC agreement commits the broker who chooses to give advice to a fiduciary standard,
meaning that the advice given must be in the best interests of the client.</span></div>
<span style="font-family: calibri;"><div style="margin: 0px 0px 11px; text-align: justify;">
And further, the broker must give disclosure,
and be transparent, about the products and compensation involved. </div>
</span><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikHaTqPJww5vsev5IS1v86em5GiMT0X-nuyQtMgYdJlF4gNbca0VxIIZjICPOTvcn7Y3CwONbNQnlaMDeLmL2OdNRps66LmAkL_P2LrOerkdRmIJ5sIaJuj8settWKqhwtmTNxNlE9KmI/s1600/people-helping-people-people-helping-people-2kErIR-clipart.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="171" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikHaTqPJww5vsev5IS1v86em5GiMT0X-nuyQtMgYdJlF4gNbca0VxIIZjICPOTvcn7Y3CwONbNQnlaMDeLmL2OdNRps66LmAkL_P2LrOerkdRmIJ5sIaJuj8settWKqhwtmTNxNlE9KmI/s200/people-helping-people-people-helping-people-2kErIR-clipart.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: clipartkid.com</td></tr>
</tbody></table>
<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: calibri;">This rule has caused quite the
stir on Wall Street, and among all manner of financial institutions and
“advisors”.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">The most vocal and primary
critics of the DoL fiduciary rule are those firms which stand to lose the most
through the implementation of the rule.</span><span style="margin: 0px;"><span style="font-family: calibri;">
</span></span><span style="font-family: calibri;">These firms are primarily brokerage firms, represented by the Securities
Industry and Financial Markets Association, or SIFMA, and the insurance
companies who specialize in annuities, represented by organizations such as the
National Association for Fixed Annuities, and the American Council of Life
Insurers.</span><span style="font-family: calibri;"> </span></div>
<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: calibri;">Both personally and
professionally, we applaud this rule.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">We
have chosen to serve as fiduciaries to clients, including retirement plans, and
co-fiduciaries to plan trustees, for many years.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">We embrace this role, as we believe it serves
clients well.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Of course, our business is
the giving of professional advice, and related administrative and management
services.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Our business is specifically
NOT the selling of financial products.</span><span style="font-family: calibri;"> </span></div>
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<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhb8iiS18J8RulwJvcWR5DTE3XL1pNdMTYgh6TgQfvnIkQCCRR4kaouJkVU2SkRePlXGatplkVzVWxg84qay9NUbcdHcV6VdNgpqHQcUCnRuSKTHlyQHxkUZHfQOycmilMIFcjtXY8igEY/s1600/Compliance-Rules-Guidelines_Regulations_Laws_FreeSpirit-Resort-and-Holiday-Park-Management.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhb8iiS18J8RulwJvcWR5DTE3XL1pNdMTYgh6TgQfvnIkQCCRR4kaouJkVU2SkRePlXGatplkVzVWxg84qay9NUbcdHcV6VdNgpqHQcUCnRuSKTHlyQHxkUZHfQOycmilMIFcjtXY8igEY/s200/Compliance-Rules-Guidelines_Regulations_Laws_FreeSpirit-Resort-and-Holiday-Park-Management.jpg" width="189" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: freespiritresorts.com.au</td></tr>
</tbody></table>
<div style="margin: 0px 0px 11px; text-align: justify;">
<span style="font-family: calibri;">The fiduciary rule was to have
gone into effect on April 10</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">, 2017.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Last Wednesday, the DoL delayed implementation
for 60 days, until June 9</span><sup><span style="font-family: calibri; font-size: x-small;">th</span></sup><span style="font-family: calibri;">.</span><span style="margin: 0px;"><span style="font-family: calibri;">
</span></span><span style="font-family: calibri;">While the rule and its implementation have become a political football,
we fully expect the rule to become law.</span><span style="margin: 0px;"><span style="font-family: calibri;">
</span></span><span style="font-family: calibri;">Whether brokers like it or not, and they don’t, societal and cultural
trends, as well as legislation and regulation, are demanding transparency, full
disclosure, and professional financial advice that is distinct and separate
from the placement of products.</span><span style="font-family: calibri;"> </span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">Note that this DoL fiduciary
rule has expanded the application of the fiduciary standard to IRAs, and not
just to retirement plans, which have long been the DoL’s primary focus.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">However, as noted above, we expect the trend
toward a fiduciary approach regarding financial and investment advice to
continue, regardless of the tax status of the assets or cash flow in question.</span><span style="font-family: calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;"><br /></span></div>
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</div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8BQj3U_G_wG61XaUZWGNC2BeOczb2YjshprOUiiUWputvedNTzFCglUDPXRzujrQf5JTqD0xZa26UXjWd3dnOU25AdTe2lIX48DhFDpa3hSTrhttBvCs5ivprw9VdX5Rwo0QBBho19gI/s1600/questionmark.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj8BQj3U_G_wG61XaUZWGNC2BeOczb2YjshprOUiiUWputvedNTzFCglUDPXRzujrQf5JTqD0xZa26UXjWd3dnOU25AdTe2lIX48DhFDpa3hSTrhttBvCs5ivprw9VdX5Rwo0QBBho19gI/s200/questionmark.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: galleryhip.com</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">One challenge for consumers
though, is gaining clarity on the scope and use of the word “fiduciary”.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">The DoL ruling in question mandates that
those advisors interacting with retirement plans and IRAs put the client’s
interest first.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">For decades though,
anyone offering advice to retirement plans has been held to a fiduciary
standard.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;"><br /></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">While in our opinion enforcement
of this fiduciary standard for those offering advice to retirement plans has
been lax in past decades, the DoL has been stepping up its enforcement activity
over the last ten years or so.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">This is
as it ought to be, as far as we are concerned.</span><span style="font-family: calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;"><br /></span></div>
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</div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdEnQ4Svassx-TEY1_Ui9b0p_8g0YCxpuyVvk8fGOtlkn8PcEzE5q4x0Cxr7oiQWma2ukAdRY4Lz-fwGsLx_lhtez5JLcHeHcWK34bRUa4NPxP81lhIGhDU0hKD4mFY_EAHliAzaiuaQU/s1600/retirement-planning+eggs.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="132" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdEnQ4Svassx-TEY1_Ui9b0p_8g0YCxpuyVvk8fGOtlkn8PcEzE5q4x0Cxr7oiQWma2ukAdRY4Lz-fwGsLx_lhtez5JLcHeHcWK34bRUa4NPxP81lhIGhDU0hKD4mFY_EAHliAzaiuaQU/s200/retirement-planning+eggs.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: masspay.net</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">For those who have
responsibility for retirement plans, they have begun reading and hearing more
about their role as fiduciaries over the last several years, even before the
introduction of the current rule.</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Within
the context of a retirement plan subject to ERISA, there are roles as
fiduciaries defined by ERISA Sections 3(16), 3(21), and 3(38).</span><span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">We will cover these in more detail in future
commentaries.</span><span style="font-family: calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;"><br /></span></div>
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<span style="font-family: calibri;"><br /></span></div>
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<span style="font-family: calibri;">Quote of the week:</span><span style="font-family: calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;"><br /></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: calibri;">“Stewardship is the hallmark
of life on earth.”</span></div>
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</div>
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"><span style="font-family: calibri;"> </span></span><span style="font-family: calibri;">Sunday
Adelaja</span></div>
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<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-33631498811377419622017-04-04T21:29:00.000-04:002017-04-04T21:29:05.933-04:00Polite<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-PphoqPcYc3hV_qwSRlykhGyaPO8kQ6voaKFYqWCLjb2DkGZ_h0EoJ8JqEG3jii2MA09aseAsp1DOKFWuAH1vvtyFbiJtprms46nh4ZSPqnh9sV3n7V-6OTRudpOZ1axiwGb29CU-Wic/s1600/CAG.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="119" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-PphoqPcYc3hV_qwSRlykhGyaPO8kQ6voaKFYqWCLjb2DkGZ_h0EoJ8JqEG3jii2MA09aseAsp1DOKFWuAH1vvtyFbiJtprms46nh4ZSPqnh9sV3n7V-6OTRudpOZ1axiwGb29CU-Wic/s320/CAG.jpg" width="320" /></a></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;"><br /></span></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">Once again, the
stock market was kind to us, in the quarter just finished, giving us two back
to back solid quarters in the equity markets.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;">
</span></span><span style="font-family: "cambria"; font-size: large;">The bond or fixed income market also had a good first quarter of 2017,
unlike its experience during the fourth quarter of 2016.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">The question on
many minds is how much longer the bull market can continue, given that we are
now eight plus years into this run.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">I
don’t know.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">Therefore, we have chosen,
both personally and professionally, to take a long term view, to embrace
uncertainty, and to have a deep understanding of what money can and cannot do.</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">Looking at
specific investment sectors for the first quarter, the Dow Jones Industrial
Average was up 4.56%, the S&P 500 was up 5.53%, and the NASDAQ Composite
was up 9.82%.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">Turning to international
markets, the MSCI Emerging Markets Index moved from 380 to 423 during the first
quarter, an increase of 43 points, or 11.3%.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;">
</span></span><span style="font-family: "cambria"; font-size: large;">The MSCI Europe and Middle East Index moved from 89 to 95 during the
first quarter, an increase of 6 points, or 6.7%.</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">Yield on ten
year Treasuries stand at 2.4%, about where they started the year, in spite of
the Fed’s interest rate increase.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">The
Fed is suggesting another two or three interest rate increases this year.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">It is very likely that bond prices already
reflect these anticipated changes.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">BLV,
the Vanguard long bond ETF, started the year at $89.13, bottomed in mid-March
at $87.41, and finished March at $90.04.</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">As noted in past
commentaries, the market’s outperformance appears to be driven by the expectation
of tax reform and eased government regulation.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;">
</span></span><span style="font-family: "cambria"; font-size: large;">To date, Congress and the White House are still working toward achieving
these goals.</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">Turning our
attention to the economy, GDP during Q4 2016 was just over 2% on an annualized
basis, roughly in line with performance among heavily regulated, mature
economies.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">It is possible to increase
this growth, though such growth would require significant intent and follow
through on the part of Congress, the White House, and regulators.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">The referenced
tax reform and regulatory easing would be good steps in the right direction.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">By way of information, an increase to a 3%
annual growth rate from a 2% growth rate would add more than $180 billion in
economic activity, based on 2016 GDP of $18.55 trillion.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">Project this difference over ten years, and
it’s not hard to imagine hundreds of thousands of new jobs, increasing wages,
billions in capital formation, thousands of new business start-ups, significant
increases in tax revenue to balance strained budgets, and a variety of other
positive outcomes.</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">Consumer
spending was up 2.4% during Q4 2016.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;">
</span></span><span style="font-family: "cambria"; font-size: large;">Household finances are fairly sound, according to Moody’s, with
household debt service near a 35 year low, and household savings holding steady
at close to 5%.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">My guess is that the
trauma of 2008-09, and the financial habits developed by many during that time,
won’t be soon forgotten.</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">Kate Taylor
wrote an interesting article for Business Insider on hometown food retailer
Chick-fil-A.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">According to the article,
which you can find at </span><a href="http://www.businessinsider.com/chick-fil-a-is-the-most-polite-chain-2016-10"><span style="color: blue; font-family: "cambria"; font-size: large;">http://www.businessinsider.com/chick-fil-a-is-the-most-polite-chain-2016-10</span></a><span style="font-family: "cambria"; font-size: large;">,
the key to the chain’s success is politeness.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;">
</span></span><span style="font-family: "cambria"; font-size: large;">Based on just my experience, it seems that the words “please”, “thank
you”, and “my pleasure” are imbedded in the DNA of all Chick-fil-A
employees.</span><span style="margin: 0px;"><span style="font-family: "cambria"; font-size: large;"> </span></span><span style="font-family: "cambria"; font-size: large;">The time, energy, and money
that the company invests in training apparently pays off, as the stores average
$4 million in annual sales, compared to the KFC average of $1 million per
store.</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "cambria"; font-size: large;">Quote of the
week:</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "calibri"; font-size: large;">“Politeness
is the flower of humanity.”</span></div>
<div style="text-align: justify;">
<span style="margin: 0px;"><span style="font-family: "calibri"; font-size: large;"> </span></span><span style="font-family: "calibri"; font-size: large;">Joseph
Joubert</span></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="text-align: justify;">
<span style="font-size: large;"></span><br /></div>
<div style="line-height: 200%; margin: 0px; text-align: justify;">
<span style="font-family: "calibri"; font-size: large;">“Be polite;
write diplomatically; even in a declaration of war one observes the rules of
politeness.”</span></div>
<div style="text-align: justify;">
<span style="margin: 0px;"><span style="font-family: "calibri"; font-size: large;"> </span></span><span style="margin: 0px;"><span style="font-family: "calibri"; font-size: large;"> </span></span><span style="font-family: "calibri"; font-size: large;">Otto von Bismarck</span></div>
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<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-87792719713126468772017-03-21T18:00:00.000-04:002017-03-21T18:00:26.317-04:00<span style="color: #990000;"></span><div class="separator" style="clear: both; text-align: center;">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCfWTwIWdhyphenhyphenLLuuK43V0LE-wyqUe42ifkVZt9b7HExaspijbTOdTUA1zXCliAKqwgdQkhyOAYn7lR87__wOCVS1aoDIravwlNIknedVK56QXtfQLwIeHbARgyOpUA27dBOfymg4IxDEd0/s1600/Centurion+Hi+Res+Logo.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhCfWTwIWdhyphenhyphenLLuuK43V0LE-wyqUe42ifkVZt9b7HExaspijbTOdTUA1zXCliAKqwgdQkhyOAYn7lR87__wOCVS1aoDIravwlNIknedVK56QXtfQLwIeHbARgyOpUA27dBOfymg4IxDEd0/s1600/Centurion+Hi+Res+Logo.jpg" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
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<b><span style="font-size: large;">Glory</span></b>:</div>
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<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">The Department of Labor, through its Employee Benefits Security Administration, is charged with overseeing health, welfare and benefit plans offered by employers.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">This includes 401(k) plans.</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">401(k) plans are fairly complex offerings, and are becoming more so.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Participant assets need to be tracked by source, tax characteristics, and vesting schedule, eligible employees need to be communicated with, a variety of required notices and filings need to be tracked, and the plan's investment choices need to be selected to ensure participant choice, and to comply with regulatory guidelines.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Finally, plan trustees are charged with assuring that the plan is run exclusively for the benefit of participants and their beneficiaries, and that the plan is managed with a prudent, documented, process.</span></div>
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<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">40 years ago, when 401(k) plans were in their infancy, asset managers such as mutual fund shops identified opportunity, and began making their funds available to plan sponsors.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Over the years, there has been much time, money, and energy expended to identify an "optimal" line up of actively managed funds.</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">The challenge with relying solely on actively managed funds for a 401(k) fund line up is the question of fees and performance.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Whether actively managed funds can consistently outperform passive, index offerings depends on which decade or ten year rolling time period is being measured.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">We could quote any number of white papers and studies at this point.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Suffice it to say that, net of fees, very few actively managed funds can outperform their relative index, over long periods of time.</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">An even more fundamental question is, even if we can identify those actively managed funds which outperform over a given measuring period, will most plan participants make the time to educate themselves about the offerings, so they can make intelligent investment choices?</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Evaluating participant decisions tells us that most participants want to make as simple a choice as possible, as many participants feel unprepared, even with education, to make good investment choices.</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">This has given rise to the development of easy to use pre-mixed portfolios.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">These portfolios typically come in two flavors.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">One is age-based, and the other is risk-based.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Age-based portfolios tend to be the easiest for participants.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">They can simply check a box indicating they want to use the age-based portfolio, and their money will be invested in a predetermined mix of stock and bond funds, based on their age.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">These portfolios are built around age bands that run from very young (18-22), to those near or past retirement (age 66 or 70 plus).</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">The risk-based portfolios require the answering of a few questions and then, the participant funds will be invested in a predetermined mix of stock and bond funds, in portfolios that range from conservative to aggressive.</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">Given most participant's desire to keep things simple, we have found an ideal approach to plan investment design is to populate the age and risk-based portfolios with very low cost index funds.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">There is value in having a line up of seven to ten actively managed funds, as there will always be a handful of employees who enjoy selecting their own investment options.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">We have found that fewer than 10% of the employee population will choose to select their own funds, and that this population tends to be the older, more experienced employees.</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">With this approach, plan fiduciaries are able to keep investment costs at the low end of the investment spectrum.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">While plan costs will vary, depending on average account balance, number of employer locations, and plan services selected, we see few reasons that a plan with $10 million or more in assets should have total operating expenses of greater than 1%.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">Peter Lynch managed Fidelity Magellan during the 1980's, chalking up average annual gains of 28.5% for the entire decade.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">He's written a few books, and given numerous speeches, and has developed his "cocktail party" theory of where we are in the market cycle.</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">According to Lynch, the first stage of an upward market, after the market has been down for a while, occurs when he introduces himself as an equity mutual fund manager at the party, and the other attendees nod politely and wander away.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">During stage two, new acquaintances linger a bit longer, perhaps long enough to tell him how risky the stock market is, before they move on to talk to the dentist.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">During stage three, with the market up 30% from stage one, a crowd of interested parties ignores the dentist, and circles around him all evening.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Any number of individuals tries to inquire, quietly of course, about what stocks they should buy.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">During stage four, as the market nears its top, the crowds remain around him, though this time they are telling him what stocks to buy.</span><span _mce_style="margin: 0px;" style="margin: 0px;"> </span><span _mce_style="font-family: "Cambria";" cambria="">Lynch said that when he looks up the dentist's stock tips in the paper, and wishes he had taken the dentist's advice, it's a sure sign the market has reached a top, and is due for a tumble.</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">Quote of the week:</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="font-family: "Cambria";" cambria="">"The glory of the workman, still more of a master workman, that he does his work well, ought to be his most precious possession; like the honor of a soldier, dearer to him than life."</span></div>
<div _mce_style="margin: 0px; text-align: justify; font-size: 12pt;" style="font-size: 12pt; margin: 0px; text-align: justify;">
<span _mce_style="margin: 0px;" style="margin: 0px;"> <br /> </span><span _mce_style="font-family: "Cambria";" cambria="">Thomas Carlyle</span></div>
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<span _mce_style="font-family: "Cambria";" cambria=""> </span></div>
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<span _mce_style="font-family: 'Cambria'; font-size: 10pt;" style="font-family: 'Cambria'; font-size: 10pt;"> </span><b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>
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Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-37774924886790144722017-03-07T15:56:00.000-05:002017-03-07T15:56:22.988-05:00
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<b style="mso-bidi-font-weight: normal;"><span style="color: #943634; font-family: "Georgia",serif; font-size: 14pt; margin: 0px;">Eight</span></b></div>
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<b style="mso-bidi-font-weight: normal;"><span style="color: #943634; font-family: "Georgia",serif; font-size: 14pt; margin: 0px;">March
7, 2017</span></b></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Georgia",serif; margin: 0px;">Eight:</span></b></div>
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<span style="font-family: Calibri;">What a difference eight years makes!</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It was eight years ago today, on Monday,
March 9, 2009, that the Dow Jones Industrial Average hit bottom, closing at
6547.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The S&P 500 closed that day at
676.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Last Friday, these indices closed
at 21,005 and 2383 respectively, each up by a multiple of more than three in
the last eight years.</span></div>
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<span style="font-family: Calibri;">Many prognosticators spill lots of ink, attempting to divine
the direction of the market, most of them with little success.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The challenge seems to be that the market
doesn’t correlate well with any specific external indicator.</span></div>
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<span style="font-family: Calibri;">Some would think that economic policy has an impact on the
market, yet studies show the market is agnostic to which political party
controls the White House and Congress.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Other factors are sentiment, interest rates, and earnings.</span></div>
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<span style="font-family: Calibri;">If sentiment were the only indicator, it seems we would be
more than halfway to the top of the current bull market.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Sir John Templeton, the country boy from
Tennessee who built his career investing outside the U.S., said that “Bull
markets are born on pessimism, grow on skepticism, mature on optimism, and die
on euphoria.”</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">I’ll agree with my friend
Jim, who said the current sentiment seems to be somewhere between skepticism
and optimism.</span></div>
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<span style="font-family: Calibri;">Interest rates are low to the extent that orphans, widows,
and pensioners can earn nothing on debt.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Therefore, many in this group have invested in the stock market, with a
special emphasis on dividend paying stocks.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">This has pushed the price/earnings, or P/E ratio of the S&P 500 to
26.75, and the P/E of the DJIA to 21.45, compared to historical averages for
these indices of about 15.</span></div>
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<span style="font-family: Calibri;">Finally, many companies over the last several years have
built outsize cash reserves, as there was material uncertainty about the state
of government regulation, and its impact on business.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This defensive approach to business led to
earnings that were likely lower than they could otherwise have been, if those
reserves had instead been invested to grow revenue.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Currently, expectations of promises delivered
around a lower corporate tax structure, as well as regulatory and healthcare
reform, have fueled stock prices over the last four months.</span></div>
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<span style="font-family: Calibri;">What’s next?</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We don’t
know.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The future isn’t given to us, and
is at best a promise.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We can say with
certainty that at some point we will experience another bear market, defined as
a drop in stock prices of 20% or more.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">We don’t know the timing of that bear market.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Over the last eight years, we have had ten pullbacks of 5%
or more, with five of those being in correction territory, defined as a 10%
drop.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We could have several of these before
a bear market sets in, and according to Deutsche Bank, the stock market has a
correction of 10% or more every 357 days.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">In the meantime, favorable interest rates, sentiment, and the
expectation of corporate earnings continue to drive the stock market.</span></div>
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<span style="font-family: Calibri;">On the economic front, GDP growth for Q4 2016 was positive,
up 1.86%, though that was half the rate of the 3</span><sup><span style="font-family: Calibri; font-size: small;">rd</span></sup><span style="font-family: Calibri;"> quarter.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Consumer spending remained strong in Q4, up
2.05%, while the nation’s savings rate stood at 5.6%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Real disposable income was revised upward for
Q4, to +2%.</span></div>
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<span style="font-family: Calibri;">Last Friday, Janet Yellen, head of the FOMC, seemed to
indicate that the Fed had done just about all it could do to stimulate growth,
while holding firm on inflation.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Further
progress, she seemed to suggest, would need to come from fiscal policy changes
– taxes and regulation – rather than further monetary policy actions.</span></div>
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<span style="font-family: Calibri;">Quote of the week:</span></div>
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<br /></div>
<div style="text-align: justify;">
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">“The glory of a workman, still more of a master workman,
that he does his work well, ought to be his most precious possession; like the
honor of a soldier, dearer to him than life.”</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Thomas Carlyle</span></div>
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Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-16550319791147246222017-02-20T14:57:00.003-05:002017-02-20T14:57:42.718-05:00
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<b style="mso-bidi-font-weight: normal;"><span style="color: #943634; font-family: "Georgia","serif"; font-size: 14pt; margin: 0px;">Cash</span></b></div>
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<b style="mso-bidi-font-weight: normal;"><span style="color: #943634; font-family: "Georgia","serif"; font-size: 14pt; margin: 0px;">February
20, 2017</span></b></div>
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">Cash:</span></b></div>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">The
public markets so far this year have been as kind to us, as this part of 2016
was unkind.<span style="margin: 0px;"> </span>This doesn’t mean much
though, as 2016 turned out to be a decent year in the public markets.</span></div>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">We
like Mark Hulbert’s musings on the public financial markets, as he generally
offers observations based on history and solid analysis, rather than attempting
to divine what may happen next.<span style="margin: 0px;"> </span>In late
December, he wrote a column suggesting that we should lament the length of time
it has taken the Dow to reach 20,000.</span></div>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">In
the article, Hulbert offered that if the domestic stock market had risen at the
same rate in the 21<sup>st</sup> century as it had in the 20<sup>th</sup>
century, the DJIA would be above 24,000.<span style="margin: 0px;">
</span>At some point of course, the DJIA will hit 100,000.<span style="margin: 0px;"> </span>If the DJIA has an annualized return of 2%,
Dow 100,000 shows up in 2098.<span style="margin: 0px;"> </span>If on the
other hand, the DJIA has an annualized return of 6%, Dow 100,000 shows up in
2044, less than 30 years from now.</span></div>
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<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">You
can find the entire article at <a href="http://www.marketwatch.com/story/why-dow-20k-is-the-mark-of-an-underachieving-market-2016-12-15"><span style="color: blue;">http://www.marketwatch.com/story/why-dow-20k-is-the-mark-of-an-underachieving-market-2016-12-15</span></a>.</span></div>
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</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">In
business news, Coke said its profit fell 55% as global sales volume dipped, and
the company took charges related to exiting the manufacture and distribution of
its drinks.<span style="margin: 0px;"> </span>The company will redeploy
proceeds into marketing.<span style="margin: 0px;"> </span>According to CB
Insights, VC firms put $3.1 billion into a record 279 cybersecurity startups in
2016, as security breaches continue to make the news and cause concern.</span></div>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">In
economic news, the BLS issued its JOLT report, or Job Openings and Labor
Turnover Survey.<span style="margin: 0px;"> </span>It showed that as of
the end of December, there were 5.5 million job openings in the U.S.<span style="margin: 0px;"> </span>During December, 5 million people lost jobs,
and 5.3 million found new jobs.<span style="margin: 0px;"> </span>There
are currently about 152 million non-farm private sector employees, meaning that
there are 3.6 job openings for every 100 employees.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">The
employment challenges seem to have more to do with location, training,
preparedness, and other factors, than anything else.<span style="margin: 0px;"> </span>According to the BLS, continuing jobless
claims are near 2 million.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">The
labor force participation rate, according to the BLS, stands at 62.9%, at or
near the 63% mark where it has parked since October 2013.<span style="margin: 0px;"> </span>The participation rate high point came in the
late 90’s, peaking at 67.2%.<span style="margin: 0px;"> </span>What’s
remarkable though, is not the decline in the participation rate.<span style="margin: 0px;"> </span>That’s a function of everything from the
macro and micro economies to personal choice.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">What’s
remarkable is that while the population of the U.S. continues to grow, our
economy continues to find jobs for people.<span style="margin: 0px;">
</span>Some background.<span style="margin: 0px;"> </span>In 1790, the
U.S. population was 4 million.<span style="margin: 0px;"> </span>It hit 50
million in 1880, 100 million about 1919, 150 million in the late ‘40’s, 200
million before 1970, and 300 million before 2005.<span style="margin: 0px;"> </span>During this stretch of the last half of the
20<sup>th</sup> century, we continued to put people to work.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">What’s
even more interesting is which companies have been doing the hiring.<span style="margin: 0px;"> </span>More on this later, but it’s not the Fortune
1000.<span style="margin: 0px;"> </span>It’s those privately held firms
with fewer than 500 employees who have been doing the bulk of the hiring.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">So
what happens when doctors only take cash?<span style="margin: 0px;">
</span>Art Villa, of Helena, Montana, found he needed a knee replacement.<span style="margin: 0px;"> </span>The hospital near his home charged $40,000,
not including the anesthesiologist, physical therapy, or the rehab stay.<span style="margin: 0px;"> </span></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">During
his research, he found the Surgery Center of Oklahoma, founded by Keith Smith
and Steve Lantier in Oklahoma City in 1997.<span style="margin: 0px;">
</span>The entire facility is cash based.<span style="margin: 0px;">
</span>It accepts no insurance or third party reimbursement from any vendor or
provider of any kind.<span style="margin: 0px;"> </span>Villa’s knee
replacement was $19,000, which all-in price included airfare to Oklahoma City,
physical therapy, meds, and other costs.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">You
can read the entire story at <a href="http://time.com/4649914/why-the-doctor-takes-only-cash/"><span style="color: blue;">http://time.com/4649914/why-the-doctor-takes-only-cash/</span></a>.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">Health
care in the U.S. appears to be the best in the world.<span style="margin: 0px;"> </span>Health care financing however, is a bit
messier.<span style="margin: 0px;"> </span>Since there appears to be
little clarity regarding health care financing, we expect all cash health care
financing to continue to be a viable option for many.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">Quote
of the week:</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;">“There
is no illness that is not exacerbated by stress.”</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;"><span style="margin: 0px;"> </span>Allan
Lokos</span></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<span style="font-family: "Georgia","serif"; font-size: 12pt; margin: 0px;"><span style="margin: 0px;"> </span></span></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-46667370167952650292017-02-13T18:41:00.001-05:002017-02-13T18:41:16.438-05:00LIFE<span style="font-family: Calibri;"></span><br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Glad to be back with you.</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">It seems the first few weeks of the year have been full for us, though
we are grateful for work to do.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Perhaps you’ve seen an advertisement for 26(f) investment
programs.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">We’ve had a few questions, so
wanted to give a summary here.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">26(f)
pertains to U.S. Code 26 Subtitle F.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">The
programs themselves are nothing new, though the marketing title is a bit
different.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Note that the 26(f) programs
are life insurance.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Here’s some detail.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<span style="font-family: "calibri";"></span></div>
<div style="margin: 0px; text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5it49vrVrRZOEF5i6BUugp5_DqxDfV_14PCEE6inKyS_SPF-vMqSIZg4dKVF7pbvfxKJJAcXcl4F5H-sXV6337uvHfUwSX1zOPv5_E3szq53RK-2O34MBfkZ9QLHIfTzz6-wsnDY14dU/s1600/snoopy.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5it49vrVrRZOEF5i6BUugp5_DqxDfV_14PCEE6inKyS_SPF-vMqSIZg4dKVF7pbvfxKJJAcXcl4F5H-sXV6337uvHfUwSX1zOPv5_E3szq53RK-2O34MBfkZ9QLHIfTzz6-wsnDY14dU/s200/snoopy.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: clipartbest.com</td></tr>
</tbody></table>
</div>
<div style="text-align: justify;">
<span style="font-family: "calibri";">
</span></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">When you have a taxable investment account, and own Coke
stock, you take the dividends as income, and pay tax on the capital gain
if/when you sell the stock.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Nice and
clean.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">When you have a 401(k), IRA, etc., you make deposits,
generally on a pre-tax basis, and all earnings/gain are tax-deferred until your
age 70.5.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">At that point, you are subject
to RMDs, or required minimum distributions, which are taxable, and which are
about 3.5% of total IRA balances the first year of the RMD, and increase on a %
basis thereafter, as the distribution table is a life expectancy table.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">When you have a Roth IRA/401(k), under current tax law,
deposits are made after tax, and all earnings and distributions are tax free,
given a nominal holding period.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">When you put dollars into a permanent whole life insurance
contract, those dollars are, in most cases, after tax dollars.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">If you keep adding funds to the contract over
many years, or if you make a lump sum deposit, or larger than required annual
deposits, you can, in short order, build significant cash inside the life
contract.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Taxation of life insurance is
a bit unique.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">With life insurance, during the accumulation phase, earnings
inside the contract grow tax-deferred, similar to growth within your
401(k)/IRA.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Any time you want to take
money from a life insurance contract, such distributions are treated as
deposits first, earnings second, basically FIFO (First-In, First-Out)
accounting.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">However, it is possible for a policyholder to accumulate
significantly more in cash value than they have in basis/deposits, especially
if they load up the policy with deposits, or hold the contract for decades, or
both.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">In that case, the policyholder, if
they want cash flow, can take distributions until basis is exhausted.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Thereafter, they can continue to take
distributions, which will be taxed as ordinary income, or they can change the
characteristics of the distribution to a loan from the policy.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">If the policyholder takes cash flow in the
form of a loan, it is not considered taxable income.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">So, some in the life insurance community, knowing these
characteristics, promote the use of permanent life insurance as an alternative
form of retirement cash flow, which is one way to use permanent life insurance.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">In years past, it was common to frontload a
permanent life policy with cash, and use a nominal death benefit, in order to
maximize cash accumulation, given the tax characteristics of life
insurance.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcX62SVsVDCG_IgV1qWLqTmcFl49r6J5EPbIkGFcnaU9zYGrA9-ty3dCmCx98Y9s4hxwI7YBhyeOYMLNfd0v3Rx9FlXbFOjupsoUlXUAugdQbv4jYTennhV2zbBtqHTy2hFbJRgyzzmuk/s1600/money.png" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="118" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcX62SVsVDCG_IgV1qWLqTmcFl49r6J5EPbIkGFcnaU9zYGrA9-ty3dCmCx98Y9s4hxwI7YBhyeOYMLNfd0v3Rx9FlXbFOjupsoUlXUAugdQbv4jYTennhV2zbBtqHTy2hFbJRgyzzmuk/s200/money.png" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: money.cnn.com</td></tr>
</tbody></table>
</div>
<span style="font-family: "calibri";"><div style="margin: 0px; text-align: justify;">
<br /></div>
</span><div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Congress got involved, with TAMRA 1988, and under current
law, tax characteristics of life insurance change if the contract is considered
a Modified Endowment Contract, or MEC.</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">Though a complete discussion of MEC contracts is far beyond the scope of
this commentary, the simple answer is that if a life insurance contract is
considered a MEC, distributions are taxed on a LIFO (Last-In, First-Out) basis,
instead of a FIFO basis.</span><span style="font-family: "calibri";"> </span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">I personally have no issue with permanent life insurance and
in fact, believe it can serve as a good planning tool as part of long term
planning.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">I have significant amounts of
personal life insurance myself, with a company and an agent that I’m pleased to
work with.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";"> </span></div>
<div style="text-align: justify;">
</div>
<span style="font-family: "calibri";"><div style="margin: 0px; text-align: justify;">
<br /></div>
</span><div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Keep in mind that, if you use life insurance for long term
retirement planning purposes, the contract will need to stay in force for life,
or all earnings are taxable.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">This
decision, like all financial decisions, needs to be made taking into account
all aspects of your financial life, and with the advice and input of
</span><span style="font-family: "calibri";">experienced professionals.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">What I have an issue with is that small percentage in the
life insurance community developing marketing ideas and plans built on
obfuscation, confusion, and misinformation, as a way to sell life
insurance.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Most people need life
insurance, and most need more than they have.</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">There should be no need to turn to fuzzy marketing to get the job done,
including using 26(f) language as a way to create confusion.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTAcZ1ler9nKhYRAP2CVs3HSWcLXRzxTM_3EZgIFi-2ZcpmybWA0rNeL6x9P0nqvpcSCF0WlFYfxBdX_YVyRwLuE7pasGpm7Hkeu0QGCjGm7GcgCAtoNnboQsUfOaVL0lgpJN4K2zgEQU/s1600/solomon+huebner.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="141" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTAcZ1ler9nKhYRAP2CVs3HSWcLXRzxTM_3EZgIFi-2ZcpmybWA0rNeL6x9P0nqvpcSCF0WlFYfxBdX_YVyRwLuE7pasGpm7Hkeu0QGCjGm7GcgCAtoNnboQsUfOaVL0lgpJN4K2zgEQU/s200/solomon+huebner.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: theamericancollege.edu</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Solomon Huebner, of the Wharton School, was a leader in the
development of economic theory around human life values, in the early part of
the 20</span><sup><span style="font-family: "calibri"; font-size: x-small;">th</span></sup><span style="font-family: "calibri";"> century.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">He was also
founder of the American College of Life Underwriters, now known as the American
College, in Bryn Mawr, Pennsylvania.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">The
American College is one of the premier educational institutions for the
professional in financial services.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">I’ll
wrap this week’s thoughts with one of his quotes.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">“The basis of life insurance is the dollar value of human
life-the factors of personal character, health, industry, education, training
and experience, creative ability, and driving force and patience, to bring
about a realization of what the mind creates.</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">Were it not for this value, there would be no property values.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">The human life value is the cause rather than
the effect, the permanent producer rather than the temporary product.”</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Solomon
Huebner</span></div>
<div style="text-align: justify;">
<br /></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-7760683400452819292017-01-24T10:36:00.000-05:002017-01-24T10:38:33.664-05:00SPONSOR<span style="font-size: large;"></span><span style="color: black;"></span><br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">The Bureau of Labor Statistics tracks all manner of
information, including consumer prices.</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">Each month, they release a Consumer Price Index Summary, which you can
find, for December, at </span><a href="https://www.bls.gov/news.release/cpi.nr0.htm"><span style="color: blue; font-family: "calibri";">https://www.bls.gov/news.release/cpi.nr0.htm</span></a><span style="font-family: "calibri";">.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">A few highlights are:</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">The CPI for All Urban Consumers, or CPI-U, increased 0.3% in
December, and 2.1% for 2016.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">The shelter
index was up 0.3% for the month, while gasoline was up 3%.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">The food at home index declined again, while
the food away from home index increased, with these two changes offsetting each
other.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">We have found that it is cheaper
to eat at home than to eat out, regardless of the fluctuation in the prices of
either.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">And generally, it’s healthier as
well.</span></div>
<span style="font-family: "calibri";"></span><br />
<div style="margin: 0px; text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoM6ciKmQ56V200Oa9bxVwRc_NuHCOxfprHpteUjMyA3HgMwuL8-2ak3dPwlDyrnIfnH3zxMlOLua5tNRfPm4zEAcifPIC8ko0f-TfdsP2aRu9tx4Zl_xznkzuSOB1n-tbzRgfH02tpjg/s1600/tax+guy.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoM6ciKmQ56V200Oa9bxVwRc_NuHCOxfprHpteUjMyA3HgMwuL8-2ak3dPwlDyrnIfnH3zxMlOLua5tNRfPm4zEAcifPIC8ko0f-TfdsP2aRu9tx4Zl_xznkzuSOB1n-tbzRgfH02tpjg/s1600/tax+guy.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">picture credit: getwhatyouwant.ca</td></tr>
</tbody></table>
</div>
<span style="font-family: "calibri";">
</span>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Excluding food and energy, the CPI-U was up 0.2% in
December.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Of course, housing, food, and
transportation are the three largest expenses for most households, so it seems
appropriate to pay attention to those prices and costs.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">The FairTax Act of 2017, H.R. 25, was introduced in the
House on January 3, 2017.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">The bill is a
tax reform proposal which imposes a national sales tax on the use or
consumption, in the U.S., of taxable property or services.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">This national sales tax would be in lieu of
the current personal and corporate income tax, employment and self-employment
tax, and estate and gift tax.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">There are
exemptions from the tax for used and intangible property, property or services
purchased for business, export, or investment purposes, and for state
government functions.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">The sales tax rate
will be 23% in 2019, with rate adjustments in future years.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Under the bill, family members who are lawful U.S. residents
receive a monthly sales tax rebate, known as a Family Consumption Allowance, based
on criteria related to family size and policy guidelines.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">The states have responsibility for
administering, collecting, and remitting the tax to the Treasury.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Tax revenue would be allocated among 1) general revenue, 2)
the old-age and survivors’ insurance trust fund, 3) the disability insurance
trust fund, 4) the hospital insurance trust fund, and 5) the federal
supplementary medical insurance trust fund.</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">No funding is authorized for IRS operations after FY 2021.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfkeMdXOT3tzkVAViLGncjzUOsHNI75Zi9TxORcVsiF_aNWudls1a9hsv0Hfrl9w_KkZRXgCWBjZAd-DyvScoX2UdsN1a-_smdVfRdjZ_SWwGAC77M0rsZxbVE6bklfCBC_ZbNmw5eAic/s1600/16th+amendment.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfkeMdXOT3tzkVAViLGncjzUOsHNI75Zi9TxORcVsiF_aNWudls1a9hsv0Hfrl9w_KkZRXgCWBjZAd-DyvScoX2UdsN1a-_smdVfRdjZ_SWwGAC77M0rsZxbVE6bklfCBC_ZbNmw5eAic/s1600/16th+amendment.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">picture credit: haikudeck.com</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Finally, the bill terminates the national sales tax if the
Sixteenth Amendment to the Constitution, which authorized an income tax, is not
repealed within seven years after the enactment of this bill.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">We shall see.</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">This is akin to the Impossible Dream, and I’m not certain Congress has
the intestinal fortitude to actually do this.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">If your company sponsors a 401(k) plan, and you are an owner
or a member of the executive team which oversees the plan, the first six weeks
of the year is a good time to review plan operations.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Following are some items you may want to
review, as it relates to the plan.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">PLAN DESIGN – Does the plan continue to accurately reflect
why you installed the plan initially?</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">Common reasons are either to maximize benefit to ownership, or to offer
a meaningful benefit which enhances your ability to recruit, retain, and reward
employees.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">PLAN ADMINISTRATION – Have all required notices been sent to
participants, in a delivery form which meets guidelines?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Are contributions made on a timely and
consistent basis?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Is loan management
working as it should?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">If an auto-enroll
feature is used, does this feature work in practice as it’s described in the
plan?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Does the ownership questionnaire
continue to reflect the ownership and relationship status of the employee
population?</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">PLAN INVESTMENTS – Does the plan offer a Qualified Default
Investment Alternative, or QDIA?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Does
the array of investment choices meet 404(c) guidelines, and if not, is it
intended to?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Have the plan decision
makers chosen to use age based or risk based investment options, which in many
cases make it simpler for employees to participate?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Is investment performance of the available
funds and options in line with their respective benchmarks?</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">PARTICIPANT EDUCATION AND INFORMATION – Is there a well
thought out, and consistent approach, to educating eligible employees about the
plan, how it works, how to access it, and how they can benefit from it?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">If so, is this plan executed
consistently?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Does it communicate with
participants and eligible employees in a manner that reflects how most
consumers receive information?<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhh0CPDDaozvuxN89BxvZCsfbFSHg04an-obRKlkJXLCsvKao6ItB0XyIo9rQ4y-lcKtnBaOBAbBeyVvAJc39Jz7ikrASos9rVlVbl8iZVyE-mn_2vLf6OKknIVH_XX4utmuOwhrVwUtTo/s1600/retirement-Planning.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="187" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhh0CPDDaozvuxN89BxvZCsfbFSHg04an-obRKlkJXLCsvKao6ItB0XyIo9rQ4y-lcKtnBaOBAbBeyVvAJc39Jz7ikrASos9rVlVbl8iZVyE-mn_2vLf6OKknIVH_XX4utmuOwhrVwUtTo/s320/retirement-Planning.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">picture credit: rolloveriraintogold.com</td></tr>
</tbody></table>
</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">PLAN COSTS – Are costs charged to participants benchmarked
for type and amount?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Are fund fees at or
below averages?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Has the investment
committee reviewed participant costs, and affirmed cost appropriateness for the
benefits received by participants?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Are
compliance, administrative, and advisory costs in line with norms?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Are types of costs charged to participants
appropriate, or should some of them be considered “settlor” costs, and instead
be paid by the company?</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">REGULATORY – Has the plan filed its 5500 on a timely
basis?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">If an audit is required, is the
audit completed on a timely basis?</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Are
there proposed changes to ERISA guidelines which could impact plan management?</span></div>
<div style="text-align: justify;">
</div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZuUPAsLMw5FtkHKJgnJyHqNxUnuZTAC5ikadwdtDsGjicJhnwCag3LBn6Bybfi6JkpAqU726CbKFe2PhFGeN9HcoENZn3NQeOcnn6PNp9NyXFNVl0Ext9A7E0ZhZH_mMGEK15WdF5BC0/s1600/plato.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZuUPAsLMw5FtkHKJgnJyHqNxUnuZTAC5ikadwdtDsGjicJhnwCag3LBn6Bybfi6JkpAqU726CbKFe2PhFGeN9HcoENZn3NQeOcnn6PNp9NyXFNVl0Ext9A7E0ZhZH_mMGEK15WdF5BC0/s200/plato.jpg" width="178" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">picture credit: app.emaze.com</td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">Enough of all that.</span><span style="margin: 0px;"><span style="font-family: "calibri";">
</span></span><span style="font-family: "calibri";">It looks as if that, here in Georgia, the weather will be cooling off,
and the sun will be shining, for the next week or so.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">As it does, take a few minutes, and simply
step outside to enjoy the day.</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Your work
will be there when you return.</span></div>
<span style="font-family: "calibri";"></span><br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";"><br /></span></div>
<span style="font-family: "calibri";">
</span>
<div style="text-align: justify;">
<span style="font-family: "calibri";">Quote of the week:</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: "calibri";">“You can discover more about a person in an hour of play,
than in a year of conversation.”</span><span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"><span style="font-family: "calibri";"> </span></span><span style="font-family: "calibri";">Plato</span></div>
<div style="text-align: justify;">
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-36822142309077333962017-01-16T06:12:00.000-05:002017-01-16T06:12:11.866-05:00Arm
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Instead of focusing on the transition of power this coming
Friday, let’s discuss something else.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">First, the domestic stock market is off to a much less
volatile start in 2017, by comparison to 2016.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">That’s a nice start to the year.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Last week, the Senate voted to allow a partial repeal of the
Affordable Care Act, using budget reconciliation as the tool of choice.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The House will likely follow suit.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">While this is an interesting way to address
the issue, it’s how the ACA became law to start with.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">So far, we have seen little from our elected
representatives about what’s next, regarding health care financing.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">For several years, identity thieves have focused on hacking
or accessing tax returns, as they are a trove of personal information.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">As tax season is upon us, a few suggestions
to help protect yourself, and your information, including tax returns, from
hacking or theft.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px 0px 0px 48px; text-align: justify; text-indent: -0.25in;">
<span style="margin: 0px;"><span style="margin: 0px;"><span style="font-family: Calibri;">1.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;">
</span></span></span><span style="font-family: Calibri;">Secure your computer by using firewalls and
virus protection.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px 0px 0px 48px; text-align: justify; text-indent: -0.25in;">
<span style="margin: 0px;"><span style="margin: 0px;"><span style="font-family: Calibri;">2.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;">
</span></span></span><span style="font-family: Calibri;">Encrypt files before sending them.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px 0px 0px 48px; text-align: justify; text-indent: -0.25in;">
<span style="margin: 0px;"><span style="margin: 0px;"><span style="font-family: Calibri;">3.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;">
</span></span></span><span style="font-family: Calibri;">Use passwords which contain upper and lower case
letters, numbers, and symbols.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px 0px 0px 48px; text-align: justify; text-indent: -0.25in;">
<span style="margin: 0px;"><span style="margin: 0px;"><span style="font-family: Calibri;">4.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;">
</span></span></span><span style="font-family: Calibri;">Don’t carry your SSN in hard copy.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">If you are more than 16 years old, have it
memorized.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px 0px 0px 48px; text-align: justify; text-indent: -0.25in;">
<span style="margin: 0px;"><span style="margin: 0px;"><span style="font-family: Calibri;">5.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;">
</span></span></span><span style="font-family: Calibri;">Monitor bank and credit card statements
regularly.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We would suggestion logging on
to accounts three times a week or more, simply to review activity.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px 0px 0px 48px; text-align: justify; text-indent: -0.25in;">
<span style="margin: 0px;"><span style="margin: 0px;"><span style="font-family: Calibri;">6.</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt "Times New Roman"; margin: 0px;">
</span></span></span><span style="font-family: Calibri;">Check your credit report annually.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It’s free annually at
www.annualcreditreport.com.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIV9pLzQW_s4iWNOlvPuyu1hVwzi_8sWOfhGLbhWQT-bQZLFmSHvkTKAMXz8mvjAt6bKlQsEBppJbgmOB3KeFporBigFCLhakxm7Tbm0xDvAnUTvRjYCVMsHGmSXa8vG8MyfBBRzPgaTI/s1600/iceland.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIV9pLzQW_s4iWNOlvPuyu1hVwzi_8sWOfhGLbhWQT-bQZLFmSHvkTKAMXz8mvjAt6bKlQsEBppJbgmOB3KeFporBigFCLhakxm7Tbm0xDvAnUTvRjYCVMsHGmSXa8vG8MyfBBRzPgaTI/s1600/iceland.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Credit to arts-wallpapers.com</td></tr>
</tbody></table>
</div>
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<span style="font-family: Calibri;">Think U.S. politics is interesting?</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Try Iceland.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">The small island nation of about 330,000 is a parliamentary republic run
by a directly elected president and a legislative assembly.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It is home to six political parties, at last
count.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The Independence Party, with 24.6%
support, currently governs the country.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Other parties include the Progressive Party, the Social Democratic
Alliance, the Left-Green movement, and Bright Future.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The Social Democratic Alliance came to power
in 2009 in the wake of Iceland’s financial and banking crash.</span></div>
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<span style="font-family: Calibri;">The Pirate Party, though, is the one that’s fascinating, and
is probably the one Edward Snowden would belong to if he were an
Icelander.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The party was founded in
2012, polls at 22.4%, second only to the Independence Party, and has emerged as
Iceland’s dominant political force.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The
party platform endorses direct democracy, freedom of information, and civil and
political rights.</span></div>
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<span style="font-family: Calibri;">What has caused quite the uproar, and spurred the Pirate
Party to popularity, is that Iceland’s new Prime Minister, Bjarni Benediktsson,
who took office last summer, has been implicated in the Panama Papers for having
an offshore account.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It appears that not
only did he not disclose this information during the campaign, he also lied
about it after the information came to light.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">So, the Iceland libertarians, who have coalesced around the Pirate
Party, are demanding change.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-family: Calibri;">It’s so refreshing that the behavior of politicians, which
most of the world accepts as normal, has created such a storm among our Viking
friends.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">And, I so love the warrior
heart and sense of justice among the youth.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">You can read more of the story,
and more of Iceland news and politics, at </span><a href="http://icelandmonitor.mbl.is/news/politics_and_society/2017/01/12/new_iceland_pm_says_maybe_a_mistake_not_putting_the/"><span style="color: blue; font-family: Calibri;">http://icelandmonitor.mbl.is/news/politics_and_society/2017/01/12/new_iceland_pm_says_maybe_a_mistake_not_putting_the/</span></a><span style="font-family: Calibri;">.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-family: Calibri;">The IRS recently announced the issuance of Notice 2017-10,
which is scheduled for publication on January 23, 2017.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The Notice deems certain conservation
easement (CE) transactions as potential tax avoidance transactions, and further
designates them as “listed transactions” that require additional reporting.</span></div>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">The Notice appears aimed at those CE transactions which may
contain an appraisal which isn’t “qualified”, within the meaning of the IRC, or
greatly inflates the value of the CE property.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">The Notice requires that those who have invested in a CE project since
2010 will need to file IRS Form 8886, Reportable Transaction Disclosure
Statement.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Form 8886 must be completed
accurately, completely, and timely.</span></div>
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</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">What is known is that many CE projects are legitimate.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">What is also known is that the IRS doesn’t
care for approaches to tax planning that reduce federal revenue (in this
author’s opinion).</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The “home office
deduction” is a case in point, though our friends at the IRS finally, after
consistently losing in court, conceded this deduction.</span></div>
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</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">What appears to be the case is the President-elect Trump has
used conservation projects as a part of his personal tax planning, for a number
of years.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">What we don’t know is whether
this particular ruling was influenced by the administration, though sitting
presidents, regardless of their political affiliation, have a long history of
meddling with the IRS, to serve their personal and political agenda.</span></div>
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<span style="font-family: Calibri;">Quote of the week:</span></div>
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<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">“No man ever wore a cravat as nice as his own child’s arm
around his neck.”</span></div>
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</div>
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<span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Patrick Taylor</span></div>
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<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-59343551889338851202017-01-09T06:00:00.000-05:002017-01-09T06:00:08.809-05:00Next
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<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">2016 is officially behind us, and it yielded fascinating
results.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Public markets started the
first six weeks with a massive sell-off, and finished the year strong.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Between early March and early November,
markets did little, while we all waited for what seemed to be the most
contentious presidential election in history to finally be over.</span></div>
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</div>
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</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Looking at select market index returns, the 30 components of
the Dow Jones Industrial Average, led primarily by financials and energy, were
up 16.47% in 2016.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The S&P 500 was
up 11.96%, while the Wilshire 5000 was up 12.6%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">In the small cap space, the Russell 2000 was
up 21.31% and the S&P SmallCap 600 was up 26.56%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Three year average annual returns are 9% and 9.5%,
respectively, for the S&P 500, and the S&P SmallCap 600.</span></div>
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</div>
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<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxf9aadk_MVWguCLeUjfB-kWuWFiXnyenQu1uMz6IP-UyMDFeRR5JzzK5R5Z3QvBldPDUQKLzaOtkhOE_yK-jcM-iN2nV1QwsOgvphNwhOIqiSqpDzkspy1hFkNc7H5TrBdWn_Zvk7ow0/s1600/bonds-relevant-balanced-portfolio-page-master.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="134" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxf9aadk_MVWguCLeUjfB-kWuWFiXnyenQu1uMz6IP-UyMDFeRR5JzzK5R5Z3QvBldPDUQKLzaOtkhOE_yK-jcM-iN2nV1QwsOgvphNwhOIqiSqpDzkspy1hFkNc7H5TrBdWn_Zvk7ow0/s320/bonds-relevant-balanced-portfolio-page-master.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">credit to: investec.co.uk</td></tr>
</tbody></table>
</div>
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<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">International developed markets, as measured by EFA, were
effectively flat for the year, with the 1.6% drop in price offset by the 2%
dividend.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Emerging markets, as measured
by VWO, were up 10.4%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Three year
returns are negative for both international developed and emerging markets
stocks.</span></div>
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<span style="font-family: Calibri;"><br /></span></div>
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<span style="font-family: Calibri;">Short term bonds, as measured by BSV, were up 1.42%, and
long bonds, as measured by BLV, were up 6.65%.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Three year returns are 1.25% for short bonds, and 7% for
intermediate/long bonds.</span></div>
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<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">A balanced portfolio, comprised of 32% short bonds, 19%
intermediate/long bonds, 31% domestic large cap, 5% domestic small cap, 9%
international developed, and 4% emerging markets, would have been up
7.21%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-family: Calibri;">As we look at 2017, two questions come to mind.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Those questions are, “What makes for a
healthy economy?”, and “What can we expect under the new administration?”.</span></div>
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<span style="font-family: Calibri;">Last week, we looked at long term population trends.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">A healthy society does need people, and it
benefits greatly from a prosperous, growing population.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">A healthy society also needs real, personal, and
intellectual property rights which can be enforced on an equitable and timely
basis by a competent court of law.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">A
healthy society needs freedom of association, access to capital, a culture
conducive to rewarding entrepreneurial drive, and a skilled workforce.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">A healthy society needs a tax structure
designed to exact taxes from almost all citizens, without the tax burden
impairing the desire to be productive. And a healthy society needs to be
prepared to engage in a meaningful debate about whether those who live at the
edges will be cared for by private funds, public funds, or some combination
thereof.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Finally, a healthy society
needs governors who will encourage all the above, and will choose to promote
good, and thwart evil.</span></div>
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<span style="font-family: Calibri;">Turning our attention to the upcoming administration, it is
obvious that President Trump will bring change.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">President-elect Trump has already brought change.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">For the half of you who voted for Trump, we
encourage you to remember that this is politics, and Trump is human.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">For the half of you who didn’t vote for
Trump, be encouraged that this too, shall pass, in either four or eight years.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">What could a Trump presidency look like, and what might the
economic outcomes be?</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">A few thoughts.</span></div>
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<span style="font-family: Calibri;">With Republicans controlling the White House, and both
houses of Congress, the first two agenda items will likely be health care
reform and tax reform.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">There will be
some changes to the Affordable Care Act, though we won’t make predictions about
what those will look like.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We do expect
insurance companies to survive and do well, as they operate on a cost plus
basis.</span></div>
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<span style="font-family: Calibri;">Candidate Trump suggested a 15% corporate tax rate.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We expect something in the 15% to 20% range,
possibly with incentives to repatriate what is estimated at close to $1
trillion in corporate cash, parked around the world, due the U.S. tax system’s
taxation of all income, regardless of where earned.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Taxing only income earned in the U.S.,
whether personal or corporate, may be one of the positive changes that come
from tax reform.</span></div>
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<span style="font-family: Calibri;">Trump also suggested a restructuring of personal income tax
rates to three brackets, with the highest at 33%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Along with this though, came some conversation
regarding reduced itemized deductions.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">It is likely that overall personal income tax rates will drop.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It is unlikely that tax reform will happen
without favors built into the tax system, to reward those companies and
individuals who write the checks that keep the politicians in office.</span></div>
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<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Based on the various leadership appointments to date, it
appears the emphasis will be on business growth and military strength.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Trump has gone to the business community,
rather than lifelong civil servants, for many of his appointments.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This fits his background, though it will be
interesting to see how this plays out in effective administration.</span></div>
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<span style="font-family: Calibri;">In terms of foreign policy, expect Trump to break all
traditional protocol.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We expect the
Trump administration to be friendly to those who have historically been our
friends, which should benefit Britain and Israel.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We also expect the Trump administration to
play hard ball with those who harbor or support terrorists, or who don’t
support U.S. interests at the U.N., and around the world.</span></div>
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<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Look for countries around the world, and especially across
Europe, to shift right.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Look for leaders
of these countries to work to gain favor with the new administration.</span></div>
<span style="font-family: Calibri;"><div style="margin: 0px; text-align: left;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPlH1hRyoH1GUFuB1UTAjXwUr-412G_4vHSlr73aNWKz8ZThKohQa-u3up5T6iOh6x0_zJIUBKm5ZZOoCDFS6gz5HEIsEvFeO4DdwDiO0JnwEz18v6ROK32EK1KZuJGJ_8vvTsuKgnF14/s1600/globe.png" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPlH1hRyoH1GUFuB1UTAjXwUr-412G_4vHSlr73aNWKz8ZThKohQa-u3up5T6iOh6x0_zJIUBKm5ZZOoCDFS6gz5HEIsEvFeO4DdwDiO0JnwEz18v6ROK32EK1KZuJGJ_8vvTsuKgnF14/s200/globe.png" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">credit to: clker.com</td></tr>
</tbody></table>
</div>
</span><div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Domestically, expect an emphasis on law and order, and
substantial moral support for law enforcement.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Expect Trump to use his position to encourage companies to keep jobs
stateside, and to promote business formation and growth.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Also, look for a repeal of all Obama
executive orders.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">There will be no wall.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Talk of building a wall between the U.S. and Mexico was red meat for the
campaign trail.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">There will be increased
border security.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">However, we believe
that immigration will actually be easier for those from around the world going
forward, especially if they have marketable skills, or bring money with
them.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Trump is well aware of the need
for ongoing immigration in order to support a robust economy.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">However, in going along with the law and order theme, those from
outside the U.S. with a criminal background won’t be allowed in, and those who
develop one while here will be shipped out quickly.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Sanctuary cities will lose funding.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Places such as San Francisco, Berkeley, and
Boulder will face continuing protests against the Trump administration, and
will be the home to any number of lawsuits against domestic and foreign
policy.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">None of this will make a
difference.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">The U.S. military will be told to go win wars and restore
law and order in those places around the world which matter to U.S.
interests.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The military will cease being
a playground for social experimentation.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">There is talk of infrastructure spending.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">From a tax outcomes standpoint, this could be
a repeat of the ‘80’s, when tax rates declined, and the federal deficit jumped,
though Trump is certainly no Reagan.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Looking around the world, the EU is coming apart, as many
nationals in the respective EU countries express their desire for local control
and self-direction.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The surprise is that
the EU has lasted this long.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Russia will
stand down.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Putin knows that he now has
a peer, and will mind his behavior.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Putin knows the U.S. has the strength, and with the Trump
administration, the will, to return Russia to the dark ages, if Putin doesn’t
mind his manners.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">It appears that China may be making a recovery.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The plus for China is simply the massive
number of people who live there.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The
downside is the ongoing Communist mindset, and it’s negative impact on the
country and its citizens.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">In terms of economic outcomes, a Trump presidency should
bode well for both those prepared to work, and those prepared to hire.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Those able bodied persons prepared for
neither could have a tough few years.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">The possibility of lower personal and corporate income tax
rates, repatriation of hundreds of billions of dollars, the carrot and stick
approach to keeping jobs stateside, a relaxed regulatory environment, and the
possibility of substantial infrastructure spending should be a boon to the U.S.
economy.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">So, how to invest in light of these potential outcomes?</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The following is how we are positioning.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Note that these aren’t recommendations for
you, simply thoughts from us, based on our observations of the world and the
markets.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Also be advised that, while
there is optimism in some quarters regarding potential economic outcomes, we
are also eight years into the current bull market.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">The S&P 500 has three and five year returns above its
long term mean return.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We are reducing
exposure slightly to the S&P 500.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Small cap stocks are below mean return over three years, and
above mean return over five years.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">While
this isn’t a clean call, we are increasing our small cap exposure
slightly.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Industrials, energy and
financials should perform above the mean.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Short bonds are at their mean, and intermediate/long bonds
are above their mean return, over both three and five years.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We are reducing exposure to intermediate/long
bonds.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">The economic and political climate in Europe is messy, and
will remain so.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This can make for a
challenging investment environment, though there isn’t the correlation one
would think between economic outcomes, and short-term market performance.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">International developed markets returns are
below the mean over both three and five years.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">We will maintain our current weighting.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Emerging markets have underperformed over the last three to
five years.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We are increasing our
exposure to these markets slightly.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">We always enjoy hearing from you, and look forward to any
observations you may have about what might be next for us, as a country, an
economy, or in the markets.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Quote of the week:</span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;"><br /></span></div>
<span style="font-family: Calibri;"><div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">“If we become increasingly humble about how little we know, we may be more eager to search.”</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">“Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.”</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Sir John Templeton</span></div>
</span><div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;"> </span><span style="font-family: Calibri;">“The only thing we have to fear is fear itself”.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Franklin
Delano Roosevelt </span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">P.S.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">This quote is
from FDR’s first inaugural speech, given March 4, 1933.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">You can read the entire address at </span><a href="http://historymatters.gmu.edu/d/5057/"><span style="color: blue; font-family: Calibri;">http://historymatters.gmu.edu/d/5057/</span></a><span style="font-family: Calibri;">.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
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<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-74196618158124177672017-01-04T05:30:00.000-05:002017-01-04T05:30:10.678-05:002016 Wrap
<br />
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Welcome to 2017!</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">In this first of the year issue of our commentary, we will
summarize public market outcomes for 2016, and share thoughts about what makes
for an economically healthy world.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Our
commentary on the 9</span><sup><span style="font-family: Calibri; font-size: x-small;">th</span></sup><span style="font-family: Calibri;"> will look at potential trends, with a new
administration in Washington.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWqOorAVnYxZ05sAZecaDeuoJN2Brx3bStZHl5JMaIAuWZjvicikByUANs5l9Tr3vbuXnuJlC3e7jWEY3Ojv54fUIF8v3aU4j5He-gpPf_MW_lrkHFBF0PL-bf0o1NwK_thitsj56OXXE/s1600/happy-new-year-confetti.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWqOorAVnYxZ05sAZecaDeuoJN2Brx3bStZHl5JMaIAuWZjvicikByUANs5l9Tr3vbuXnuJlC3e7jWEY3Ojv54fUIF8v3aU4j5He-gpPf_MW_lrkHFBF0PL-bf0o1NwK_thitsj56OXXE/s320/happy-new-year-confetti.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Credit to: PSDgraphics.com</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Let’s take a look at the public markets for 2016, though
with a couple of explanatory notes.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">First, these numbers are approximate, as they were pulled a few days
before the end of the year.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Second, we
are using index ETFs as proxies for market segments and investment
classes.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">With those caveats in mind,
here’s a summary of 2016.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Domestic large cap stocks, as measured by the S&P 500
(SPY), were up just over 11% for the year.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Domestic small cap stocks, as measured by the S&P 600 (VIOO), were
up 24% for the year, with most of that coming after the election.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Long term bonds (BLV) were up 5.82%, and
short term bonds (BSV) were up 1.11%.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Outside the U.S., international developed markets (EFA) were
up 0.08%, essentially flat, and emerging markets (VWO) were up 11%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Real estate (VNQ) was up 5.9%, Gold (GLD) was
up 7.29%, and commodities, excluding oil, were up 13.85%. </span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Over the last three years, commodities, oil, gold, and both
international developed and emerging markets securities have had negative
returns.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Over the same three years,
domestic large and small caps have been up 9% and 9.5%, respectively, while
long term bonds have been up almost 7%.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Domestic small cap average annual return over the last three years is
slightly below its long term average of 11%, while long term bonds are slightly
above their long term average of about 5.5%.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">A balanced portfolio for 2016, comprised of 4% cash, 32%
short bonds, 19% long bonds, 31% domestic large cap, 5% domestic small cap, and
9% international developed, would have had a return, based on the indices, of
5.67% for the year.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">So what’s the outlook for the next several years?</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Business growth depends primarily on use and
consumption of products by either consumers or other businesses, with consumers
accounting for roughly 70% of overall demand.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Consumer demand for products and services is driven primarily by
population and income growth.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Population
growth is a function of immigration policy and family size, and income growth is
a function of several things, including work and educational opportunity, as
well as cultural, social, economic, and tax policy.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">What does all that mean?</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Create an environment which is friendly to capital and business
formation, have a culture that encourages work, accomplishment, family growth
and formation, and cultural integration, and you should have a growing economy.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Where do we stand with all this?</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Let’s look just at population growth.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgx33Tn3fIczyyCwINbKuN3Lmy3xvm_2aKb8NiAvXqA-mjfNfvZZq9tn2Jh4IMA7s2e20e_asagTe4ZBiatUyz3z0qoj5OqTAFggR8xma_6rLfZxhX6EvHTC3PZEc5SVhFZCKgrx645-G8/s1600/US+Population+Growth+Rate.png" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="208" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgx33Tn3fIczyyCwINbKuN3Lmy3xvm_2aKb8NiAvXqA-mjfNfvZZq9tn2Jh4IMA7s2e20e_asagTe4ZBiatUyz3z0qoj5OqTAFggR8xma_6rLfZxhX6EvHTC3PZEc5SVhFZCKgrx645-G8/s320/US+Population+Growth+Rate.png" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">credit to: becuo.com</td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">The world’s population grew slowly until about 1920, when it
reached 1.85 billion.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The rate of growth
jumped at that point, with improvements in life quality, with the growth rate
peaking in 1962 at 2.1% annually.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The
world population has continued to grow, and currently stands at 8 billion,
though the annual growth rate has declined since 1962, and currently stands at
about 1%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It is expected to go negative
by the end of the century.</span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">These trends aren’t a business positive.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Healthy societies and economies need growing
families.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Developed countries around the
world aren’t replacing their populations with new births.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">And, in many parts of the world, societal and
cultural trends and pressures suggest few or no children.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">The driver of U.S. population growth is immigration, and the
birth rate of immigrants, which tends to be materially higher than that of the
native population.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">In the U.S., most
immigrants are of Latin origin.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The
driver of population growth in Europe is also immigration, though most
immigrants across Europe are from the Middle East and Northern Africa.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">Most of these immigrants to Europe are legitimately needy
asylum seekers.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Unfortunately, there are
a number of bad apples in these immigrant populations, just as there are in
immigrant populations to the U.S.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The
challenge Europe faces, and one which has been a problem stateside, is the
unwillingness to name evil.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">There are philosophical challenges with drawing lines
between good and evil, and very few politicians are willing to sacrifice their
position and power by drawing those lines.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Unless and until countries have leaders with the intestinal fortitude to
make such distinctions, and do something to promote good and repress evil,
there will continue to be chaos.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">But, back to population growth.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The population of many countries in Europe is
growing, and almost all of it is attributable to immigrants and their
relatively large families.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<span style="font-family: Calibri;">As noted earlier, population growth isn’t the only driver of
business health.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Other factors,
referenced above, also play a part.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">However, it’s prudent of us, from an investment perspective, to be aware
of where the people are, what the trends are, and where demand is, and is
expected to be, in the coming decades.</span></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="margin: 0px; text-align: left;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<br />
<div style="margin: 0px;">
<br /></div>
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-75184119973033548952016-12-06T05:00:00.000-05:002016-12-06T05:00:28.938-05:00Grateful
<br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdFYbL77u03O-hqJ6tdySnzONRgE2e3ag2lDPmarsXCX3YfBPmNNk9zaSXCBzqLzJwcRN6xdX2jYfDHJwwg9B0-XcMSaGUtaka36nMNgzU8v_0ZjXHcnq644ugiNnEsvBGwrf0HuHvrjk/s1600/White_House_Washington.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="232" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdFYbL77u03O-hqJ6tdySnzONRgE2e3ag2lDPmarsXCX3YfBPmNNk9zaSXCBzqLzJwcRN6xdX2jYfDHJwwg9B0-XcMSaGUtaka36nMNgzU8v_0ZjXHcnq644ugiNnEsvBGwrf0HuHvrjk/s400/White_House_Washington.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture credit: <a class="cap_link" h="ID=images.2_1,5093.1" href="http://theenchantedmanor.com/category/travel/page/6/" target="_blank">theenchantedmanor.com</a></td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">November memories include a
completed election season (finally), a continuing softening of bond prices, a
rocket ride for small cap prices, a President-elect who continues to defy all
convention, and Thanksgiving.</span><span style="font-family: Calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Turning to public markets
first, bond prices, as measured by BLV, were off 6.6% in November, over several
concerns, including that the FOMC would begin raising interest rates
consistently.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The FOMC meets next week,
and the consensus is they will raise rates by at least 0.25%.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Small caps, on the other hand,
went straight up, with most indices which track small caps up more than
10%.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">VIOO, the Vanguard Small Cap 600
ETF, was up 11.3% in November, while the Russell 2000 was up 11%.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">President-elect Trump
continues to defy all Presidential convention, making full use of the bully
pulpit of the President.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Many cringe in
embarrassment, while others cheer him on.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">He appears to be more an opportunist than a conservative, though many is
the leader who has risen to the occasion, when given the role. </span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Only time will tell what these next few years
will bring.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">They will certainly be
interesting.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">In economic news, the BLS
reported the official unemployment rate at 4.6% in November, its lowest level
since August 2007.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">According to the BLS,
November added 178,000 jobs, with a total of 15.6 million new jobs since early
2010.</span></div>
<span style="font-family: Calibri;"><div style="margin: 0px; text-align: justify;">
<br /></div>
</span><table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEia_haZjPow8URAutZB__4tsrF3dibKKr45oTlhXGPx4wHnNZjL6Xc63bKs9yN_T4I4WR-SDx74uTruQJqH3TwauMCHeA3IExhL7jY-Ja-wqQsW8xQC7T-sXrZEdxPIcdNhMqmAvV1YbLY/s1600/coca-cola.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEia_haZjPow8URAutZB__4tsrF3dibKKr45oTlhXGPx4wHnNZjL6Xc63bKs9yN_T4I4WR-SDx74uTruQJqH3TwauMCHeA3IExhL7jY-Ja-wqQsW8xQC7T-sXrZEdxPIcdNhMqmAvV1YbLY/s200/coca-cola.jpg" width="200" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: small;">Picture credit: businessinsider.com</span></td></tr>
</tbody></table>
<span style="font-family: Calibri;">Coke is studying next best
steps for growth, as the cultural war on sugary drinks has led to decreased
revenue.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Over the years, Coke, aware of
these trends, has diversified away from carbonated soft drinks to brands such
as Dasani, VitaminWater, MinuteMaid, Honestea and others.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It will no doubt continue this
diversification.</span><br />
<br />
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Speaking of fascinating
cultural trends, Snapchat has introduced its Spectacles, glasses that take
short, first person videos, which can be uploaded to its platform.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Retail is $129, with demand causing them to
sell for $5000 on eBay.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Of course, I
don’t understand which makes me a dinosaur.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">For year-end tax planning, a
few thoughts.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">On the business side, if
you need to buy equipment, buy sooner rather than later, using the available
deduction under Sec. 179.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">You can also
establish a retirement plan for the current tax year, as long as plan documents
are signed by December 31.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Funding can
take place the sooner of the day the company files its tax return or the filing
deadline, including extensions. </span><span style="font-family: Calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">On the personal side, look at
several things.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">If your employer offers
a 401(k), make sure you are maximizing contributions.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">The contribution limit for the year is
$18,000 or $24,000, if you were 50 or older this year.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Make sure your state taxes paid are at least
as much as your anticipated liability, as state taxes paid are a deduction on
your federal return.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">If you are
charitably inclined, you can use a donor-advised fund to increase deductible
contributions.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">You can choose the final
beneficiary of those contributions later.</span><span style="font-family: Calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">We enjoyed Thanksgiving.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">It was a combination family reunion for my
mother’s side of the family, and a three day Thanksgiving visit.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">There were 37 of us on Thanksgiving Day.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">On Thursday afternoon, our seven-year-old
grandson graduated from a BB gun to a 20 gauge.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">My cousin had set up the clay thrower and showed Joseph, our grandson,
how to follow and shoot the clay.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Joseph
took out a clay on his first shot with a 20 gauge.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">That was a highlight.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Enough bragging, though.</span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">As we move into the holiday
season, what are you grateful or thankful for?</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">I was thinking about this the other day.</span><span style="margin: 0px;"><span style="font-family: Calibri;">
</span></span><span style="font-family: Calibri;">Here’s a short list.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Send us an email,
or post to our blog, at </span><a href="http://www.centurionag.blogspot.com/"><span style="color: #0563c1; font-family: Calibri;">www.centurionag.blogspot.com</span></a><span style="font-family: Calibri;">,
and let us know what you are thankful for.</span><span style="font-family: Calibri;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Good health, the opportunity
to be married to my best friend, children and grandchildren who are close both
geographically and relationally, work that makes a difference, opportunities to
serve and help outside of work, opportunities to travel and see friends and
places around the country and world, and things as simple as a hot shower and
hot coffee, a home that is warm in winter and cool in summer.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">We are grateful for so many things,
experiences and people, and to the Giver of all good and perfect gifts.</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;"><br /></span></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSU3uU86gAywYPDM1804S0HbU45NgBv6LSIJWb4LuMZsc2RM9jtQicOk_2uVkD8jxDFFvxGfIvxdDkyI1tIBVWINRsQyXITNhH659lXSUI0b-FHMSzgWxafjqn8k5VoW-A5W7DZ-oI9KM/s1600/Thanksgiving1.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="229" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjSU3uU86gAywYPDM1804S0HbU45NgBv6LSIJWb4LuMZsc2RM9jtQicOk_2uVkD8jxDFFvxGfIvxdDkyI1tIBVWINRsQyXITNhH659lXSUI0b-FHMSzgWxafjqn8k5VoW-A5W7DZ-oI9KM/s320/Thanksgiving1.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: small;">Picture credit: </span><a class="cap_link" h="ID=images.2_3,5058.1" href="http://www.coniscorner.com/2013_11_01_archive.html" target="_blank"><span style="font-size: small;">coniscorner.com</span></a></td></tr>
</tbody></table>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">Quote of the week:</span></div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Calibri;">“When you rise in the morning,
give thanks for the light, for your life, for your strength.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Give thanks for your food, and for the joy of
living.</span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">If you see no reason to give
thanks, the fault lies in yourself.”</span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="margin: 0px;"><span style="font-family: Calibri;"> </span></span><span style="font-family: Calibri;">Tecumseh</span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<br /></div>
<br />
<div style="margin: 0px; text-align: justify;">
<br /></div>
<br />
<div style="margin: 0px; text-align: justify;">
<br /></div>
<br />
<div style="margin: 0px; text-align: justify;">
<br /></div>
<br />
<div style="margin: 0px; text-align: justify;">
<br /></div>
<br />
<div style="margin: 0px 0px 11px; text-align: justify;">
<br /></div>
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-22061610251438735552016-11-22T06:00:00.000-05:002016-11-22T06:00:03.550-05:00Certain
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">It appears that Donald Trump will
be sworn in as our 45</span><sup><span style="font-family: Cambria; font-size: small;">th</span></sup><span style="font-family: Cambria;"> president on January 20, 2017.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Trump mastered the art of the sound bite, and
along the way, managed to offend many.</span><span style="margin: 0px;"><span style="font-family: Cambria;">
</span></span><span style="font-family: Cambria;">What we don’t know is how well, or whether, he will govern.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Only time will tell.</span></div>
<span style="font-family: Cambria;"><div style="margin: 0px; text-align: justify;">
<br /></div>
<div class="separator" style="clear: both; text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2fYLYeZ_GxvpEzcB4Jjm5Uga-NncWcfdZbhmupIQSZT3F6ejnGq8v0NFubsPrg1FCDLAL5gN1EcfhaQoTytsw1hqVjKOzPHB2-_bzEOt1bgJsu4dbzpS9AZO5LX2j6NiDnOQTrLHJYgU/s1600/Donald+Trump+for+Pres..jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a></div>
</span><div style="text-align: justify;">
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<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2fYLYeZ_GxvpEzcB4Jjm5Uga-NncWcfdZbhmupIQSZT3F6ejnGq8v0NFubsPrg1FCDLAL5gN1EcfhaQoTytsw1hqVjKOzPHB2-_bzEOt1bgJsu4dbzpS9AZO5LX2j6NiDnOQTrLHJYgU/s1600/Donald+Trump+for+Pres..jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2fYLYeZ_GxvpEzcB4Jjm5Uga-NncWcfdZbhmupIQSZT3F6ejnGq8v0NFubsPrg1FCDLAL5gN1EcfhaQoTytsw1hqVjKOzPHB2-_bzEOt1bgJsu4dbzpS9AZO5LX2j6NiDnOQTrLHJYgU/s1600/Donald+Trump+for+Pres..jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit:<span class=" irhcs3" title="singhstation.net">singhstation.net</span> </td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">From a business and markets
perspective though, what can we expect?</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">The
public markets were very volatile between Tuesday evening, the 8</span><sup><span style="font-family: Cambria; font-size: small;">th</span></sup><span style="font-family: Cambria;">,
and the close of the markets on Wednesday, November 9</span><sup><span style="font-family: Cambria; font-size: small;">th</span></sup><span style="font-family: Cambria;">, with the
Dow swinging almost 1000 points.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">This is
measured by future activity to actual close.</span><span style="margin: 0px;"><span style="font-family: Cambria;">
</span></span><span style="font-family: Cambria;">They have, however, had a nice run since the 9</span><sup><span style="font-family: Cambria; font-size: small;">th</span></sup><span style="font-family: Cambria;">.</span><span style="font-family: Cambria;"> </span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">Republicans will control the
House, the Senate, and the White House.</span><span style="margin: 0px;"><span style="font-family: Cambria;">
</span></span><span style="font-family: Cambria;">Based on this, and comments offered by Mr. Trump during the campaign, we
can expect an attempt to overhaul or repeal the Affordable Care Act.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">It is possible that corporate tax rates would
be reduced from 35% to 15%, and that we could end up with three personal income
tax brackets, ranging from 12% to 33%.</span><span style="font-family: Cambria;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;"><br /></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">What about budget surpluses and
deficits?</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">The two most recent
presidents, George Bush and Barack Obama, added more to the deficit than all
previous presidents combined.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Our only
budget surplus in recent history came during Bill Clinton’s presidency.</span><span style="font-family: Cambria;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;"><br /></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">What about market
performance?</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Richard Nixon and George W.
Bush are the two presidents since 1970 who have presided over losses in the
markets, while Bill Clinton and Barack Obama are second and third, behind
Gerald Ford, as presidents associated with the highest total gains.</span><span style="font-family: Cambria;"> </span></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjr7zg-vm1lQSOqpAyXUzsQfuccTKvdD4aVNqWqWc3MMVdj18yMOcjJ_LLruWh-B8GFqLnetAbw5IzhRv6zHUjcYydMlOyMlEWt5WmoUSPLMDhfHC8JCSF-uacuGldFmBUOZrrP10I7CCY/s1600/market+trend.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjr7zg-vm1lQSOqpAyXUzsQfuccTKvdD4aVNqWqWc3MMVdj18yMOcjJ_LLruWh-B8GFqLnetAbw5IzhRv6zHUjcYydMlOyMlEWt5WmoUSPLMDhfHC8JCSF-uacuGldFmBUOZrrP10I7CCY/s1600/market+trend.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: <span class=" irhcs3" title="morganmckinley.ie">morganmckinley.ie</span></td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">Whether we study personal income
tax rates, budget surpluses or deficits, or the performance of the public
markets, the inputs are too broad and variable, and the data bits too complex,
to draw meaningful conclusions, or to assign specific outcomes across these
categories to either party, or to specific presidents.</span><span style="font-family: Cambria;"> </span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;"><br /></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">From a planning perspective,
there are a few considerations.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">If we
anticipate lower personal income tax rates in 2017, we can bunch
deductions.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;"><br /></span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">Some examples:</span></div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;"><br /></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">You can increase charitable
contributions.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">If you aren’t sure which
organization you want to give to just yet, you can use a donor-advised fund
through a community foundation, such as Atlanta Community Foundation, National
Christian Foundation, or Northeast Georgia Community Foundation.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">You can make the gift to your account at
these organizations now, they will issue the charitable gift receipt for 2016,
and you can decide the ultimate beneficiary of your gift next year, or later.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">You can pay state income taxes
ahead.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Any state income taxes paid this
year are deducted this year.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">While
overpayments come back as income next year, the thought is that they may come
back in a lower tax bracket.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">For those of you whose AGI is
north of $250,000, you may want to explore conservation easements.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">If you are unfamiliar with them, we would
suggest learning and study as the first step.</span><span style="margin: 0px;"><span style="font-family: Cambria;">
</span></span><span style="font-family: Cambria;">And we would encourage you to do your homework.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVJd-_XrR6ZFC2aAGcE7xTqCNV1BVIWnSzIrNWCrBfB0Cxjdfff68Z-hsFhtAZdpEVTecuSoFw0tQU0G9GBZ9fZIjQ-whlop_Csbq2o1LJIk1Z6uPxdUhg3etoqL1v16qy8bYcaSkUOsw/s1600/Donald+Trump+for+Pres..jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a><span style="font-family: Cambria;">If you have a retirement plan in
place for your company, or your employer has a plan in place, maximize
available contributions, whether from salary deferrals, or the company
checkbook.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Note that 401(k)
contributions must be made through payroll deduction.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">It isn’t too late to set up a retirement plan
for your company, but the deadline is approaching.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">On the economic front, October’s
inflation report showed an overall increase in the CPI of 0.4%, ahead of the
consensus 0.3%.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Higher energy prices
seemed to be the driver.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Core CPI, which
excludes food and energy (why I don’t know, given how much of most household
budgets are allocated to these categories) was up 0.1%.</span><span style="font-family: Cambria;"> </span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">Long bond prices are off almost
10% from their late summer highs, as fears of interest rate increases and different
administration policies under our new president took hold.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">The prospect of higher interest rates and stronger
economic growth sent the dollar to a 13-year high against the Euro, with €1 =
$1.06 at Friday’s close.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">On the bright side, some
fascinating statistics regarding progress.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">If you had purchased the
computing power found in an iPhone 5S in 1991, it would have cost you $3.56
million.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Between 1990 and 2013, maternal
mortality worldwide has dropped by almost 50%.</span><span style="margin: 0px;"><span style="font-family: Cambria;">
</span></span><span style="font-family: Cambria;">In 1981, 52% of the world lived in “absolute” poverty.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">By 2010, this number was down to 21%.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">The election outcome was
encouraging to some, and discouraging to others.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">What do we do, in the face of such
uncertainty?</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">First, don’t fear or
panic.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">The sun will come up tomorrow
morning, just as it has every day for thousands of years.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Those you love will be as close as a phone
call, and there will be the opportunity to engage in something meaningful
before the day is over.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">In short, life
will go on.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">Second, market trends are
favorable on two fronts.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">The first is
that the public market enjoys climbing a wall of worry, and there is plenty of
worry and concern at the moment.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">The
second is that the early November to late April time frame is favorable for the
stock market, in a way that is statistically significant.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">This means the outperformance during this
period, compared to the early May to late October time frame, is meaningful
enough that it can be measured.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">So, stay on plan, stay true to
what has worked.</span><span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">The market will
continue to ebb and flow though, given time and diligence on your part, it will
reward you well.</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="text-align: justify;">
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4LWEaqwrhGhTXg-155bRgIv4ixxczpmvTMGBDOrGSSEKee6AJvqeyzZLEa04-Tt2zhHLZ2alWGNZfg5oIZSEhgMChoEt2i0uWczFjLRYH47VfFBiw85TgWAW97U0Lw5NOUdCxbU-Mid4/s1600/anne+lamott.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh4LWEaqwrhGhTXg-155bRgIv4ixxczpmvTMGBDOrGSSEKee6AJvqeyzZLEa04-Tt2zhHLZ2alWGNZfg5oIZSEhgMChoEt2i0uWczFjLRYH47VfFBiw85TgWAW97U0Lw5NOUdCxbU-Mid4/s1600/anne+lamott.jpg" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Picture Credit: <a class="cap_link" h="ID=images.2_1,5061.1" href="https://presbydestrian.wordpress.com/tag/anne-lamott/" target="_blank">presbydestrian.wordpress.com</a></td></tr>
</tbody></table>
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">Quotes of the week:</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">“The opposite of play is not work, but depression.”</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Dr.
Stuart Brown</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<br /></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria;">“The opposite of faith is not doubt, but certainty.”</span></div>
<div style="text-align: justify;">
</div>
<div style="margin: 0px; text-align: justify;">
<span style="margin: 0px;"><span style="font-family: Cambria;"> </span></span><span style="font-family: Cambria;">Anne
LaMott</span></div>
<div style="text-align: justify;">
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-29566186237690047212016-11-01T09:42:00.002-04:002016-11-01T09:42:58.767-04:00Experience<div class="MsoNormal">
During the fourth quarter of each year, the IRS announces
the new limits for Defined Contribution Plans and IRAs, as well as COLA
adjustments for Social Security and other benefits. The announcement for the 2017 adjustments has
just been released, and is as follows.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Elective deferral and catchup provisions for your
401(k)/403(b) remain unchanged, at $18,000 and $6,000 respectively. Deferral and catchup provisions for SIMPLE
IRAs remain unchanged, at $12,500 and $3,000 respectively. IRA contributions and catchup provisions
remain unchanged, at $5,500 and $100 respectively.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The 415 annual additions limit increases from $53,000 to
$54,000, while the annual comp limit increases from $265,000 to $270,000. The key employee threshold increases from
$170,000 to $175,000. These limits have
to do with the amount of compensation taken into account for various maximum
benefit calculations.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The Social Security Taxable Wage Base is increasing from
$118,500 to $127,200, an increase of $8,700, or 7.3%. For those of you over the wage base, this
will increase your Social Security taxes by $665.55, with your employer kicking
in a like amount.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; margin-left: 1em; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLAdONSXa_e6eK9CfpNH_CaPL4cseJTCoOXBZG5zCD1QI0dq5aZ04Q7IZmBSwdK3H4sT1kefMsCjH0utOlKR7knSPfcCumrNfzh-_AFgMx1c0kXwEUF-XdWXegz0ud-3RZ-YOaAqaj71Y/s1600/social+security.png" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLAdONSXa_e6eK9CfpNH_CaPL4cseJTCoOXBZG5zCD1QI0dq5aZ04Q7IZmBSwdK3H4sT1kefMsCjH0utOlKR7knSPfcCumrNfzh-_AFgMx1c0kXwEUF-XdWXegz0ud-3RZ-YOaAqaj71Y/s1600/social+security.png" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">www.ssa.gov</td></tr>
</tbody></table>
<div class="MsoNormal">
Social security retirement income benefits are increasing by
0.3%, the COLA adjustment made by the<a href="https://www.ssa.gov/news/press/factsheets/colafacts2017.pdf">https://www.ssa.gov/news/press/factsheets/colafacts2017.pdf</a>.<o:p></o:p></div>
Social Security Administration for 2017. You can see a full list of the Social
Security related adjustments at <br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
On the economic front, inflation, as measured by CPI, was up
0.3% in September, and up 1.5% over the last year. The election season is almost behind us,
eight days from being over as you read this.
One more thing to be thankful for as we head into the holiday
season. Most prognosticators expect the
FOMC to raise interest rates in December, and again next year.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In business news, Coke reported earnings that beat analysts’
estimates, though net income for their third quarter was $1.05 billion,
compared to $1.45 billion in the previous year.
Snapchat anticipates raising $4 billion in its IPO, putting a value on
the company of between $25 billion and $35 billion.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
According to Reuters, the current administration wants
states to limit non-compete agreements.
We are big fans of the concept of right-to-work. We do have a preference for the federal
government employing its bully pulpit in other ways though, than telling states
and companies how to do their jobs. It’s
pretty evident that work freedom is popular.
We have only to look at migration from states who have a strong union or
strong non-compete agreement environment, to states where both employers and
employees have much freedom to choose how and for whom they work, as well as
who, whether, and when they hire and fire.<o:p></o:p></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcKzcclMDdpmdhXoN7CHJjzk04MR-VI2rMt8d8BKqwaLJ6CVVxgO-J0XRTVHmSUtvJNEY8zAk8r38xczqoTkcsZbl0qYq4tRZnAoYFgYUbXEAlLnsBYoiOmhX0W78cYTcLOJ4XWnVPAz0/s1600/Yale.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="213" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcKzcclMDdpmdhXoN7CHJjzk04MR-VI2rMt8d8BKqwaLJ6CVVxgO-J0XRTVHmSUtvJNEY8zAk8r38xczqoTkcsZbl0qYq4tRZnAoYFgYUbXEAlLnsBYoiOmhX0W78cYTcLOJ4XWnVPAz0/s320/Yale.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="font-size: xx-small;"><div class="attribution" style="-webkit-tap-highlight-color: rgba(32, 119, 182, 0.2); background-color: white; color: #424858; display: initial; font-family: "Gotham Narrow SSm 4r"; line-height: 16px; padding: 0px 0px 10px; text-align: left; user-select: text;">
Craig Warga | Bloomberg | Getty Images</div>
<span style="background-color: white; color: #333333; font-family: "Gotham Narrow SSm 4r"; text-align: left;"></span></span><div class="caption" style="-webkit-tap-highlight-color: rgba(32, 119, 182, 0.2); background-color: white; color: #424858; font-family: "Gotham Narrow SSm 4r"; line-height: 16px; padding: 0px 0px 10px; text-align: left; user-select: text;">
<span style="font-size: xx-small;">The Sterling Memorial Library on the Yale University campus in New Haven, Connecticut.</span></div>
</td></tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Goldman Sachs Q3 earnings were up 58% to $2.1 billion,
according to USA Today. Per share
earnings were $4.88, ahead of estimates of $3.83. According to CNBC, Harvard, MIT, and Stanford
led the list of private colleges whose graduates posted the highest earnings,
ten years after enrolling. You can read
the story at <a href="http://www.cnbc.com/2016/10/18/the-17-private-colleges-where-students-go-on-to-earn-the-most-money.html">http://www.cnbc.com/2016/10/18/the-17-private-colleges-where-students-go-on-to-earn-the-most-money.html</a>.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
ATT has announced plans to absorb Time Warner for $85
billion, while Delta is expanding the use of RFID luggage tags, in the hopes of
reducing its lost luggage costs.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
According to the Wall Street Journal, the U.S. is creating
startup businesses at historically low rates.
The share of private firms less than a year old has dropped from 12%,
during much of the 80’s and 90’s, to less than 8% today. The share of jobs at such firms has dropped
from 4% to 2%. Those who study such
things attribute this trend to increased regulation, more time for companies to
reach profitability and exit than some backers are willing to provide, and the
fact that boomers are retiring just as millennials are reaching the
entrepreneurship age.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Of course, as John Haltiwanger, University of Maryland
economist points out, the U.S. is still a robust economy. The U.S. economy is still more dynamic, more
flexible, and more entrepreneurial than almost any other economy on the planet. The referenced slowdown is only by comparison
to what was, not to any other economy.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
And now, for a bit of light reading as we wrap up. According to the police blotter for Flathead
County, Montana, a Columbia Falls horse went for a late-night stroll, but was
later returned to its owner. A late
afternoon caller said a Martin City dog broke into a rabbit cage and assaulted
the occupant. The rabbit required
extensive medical treatment, but is expected to make a full recovery. Three mules and one horse made a run for it
on Edgewood Drive in Whitefish.<o:p></o:p></div>
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<br /></div>
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A call at 3:17am reported a disturbance at a Kalispell
trailer park. Upon further
investigation, a woman there said she had had one glass of wine, and smoked a
little weed, so things weren’t going to get physical “yet”. <o:p></o:p></div>
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Quote of the week:<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
“The marvelous richness of human experience would lose
something of rewarding joy if there were no limitations to overcome. The hilltop hour would not be half so
wonderful if there were no dark valleys to traverse.”<o:p></o:p></div>
<div class="MsoNormal">
Helen
Keller<o:p></o:p></div>
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Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-59471953139208668132016-10-25T05:00:00.000-04:002016-10-25T05:00:39.259-04:00Hero<div class="MsoNormal">
Public markets will continue to go up and down, businesses
will continue to thrive or not based on the relevance of the products and
services, and negative headlines will continue to attract viewers and
listeners. This week, let’s talk about
something else.<o:p></o:p></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: right;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJ_96RoLaNKUAkOmlmvmL1plDEDF6rajjfek3hxnMh06eTTu0tgo5YOCE8igpsGZ1UthRXLVCdDP8lXkPRxh8v2Tfk9UR8p2EHc_YJPJqkT8TiOYwucnh031-E3C9rkERciqp_nQYjENg/s1600/tallgrass-prairie-photo-jk-4.jpg" imageanchor="1" style="clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="208" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJ_96RoLaNKUAkOmlmvmL1plDEDF6rajjfek3hxnMh06eTTu0tgo5YOCE8igpsGZ1UthRXLVCdDP8lXkPRxh8v2Tfk9UR8p2EHc_YJPJqkT8TiOYwucnh031-E3C9rkERciqp_nQYjENg/s320/tallgrass-prairie-photo-jk-4.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><div align="center" style="background-color: #cccc99; font-size: medium;">
<span style="font-family: Verdana; font-size: xx-small;">View of tallgrass prairie in wintrer</span></div>
<div align="right" style="background-color: #cccc99; font-size: medium;">
<i><span style="font-family: Verdana; font-size: xx-small;">photo by John Kennington</span></i></div>
</td></tr>
</tbody></table>
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<div style="text-align: right;">
</div>
<div class="MsoNormal">
Clifford was born in November 1913, in a farmhouse built in
a pasture of bluestem prairie grass. He
was the youngest boy in a family of eight, seven of whom, in something of a
miracle for the times, lived to adulthood.
He rode his pony to town to attend school, played on the high school
basketball team, and in 1931, became the first in his family to graduate from
high school.<o:p></o:p></div>
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<br /></div>
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This girl Pauline, they called her Polly, had caught his eye
and in December 1933, they married in a small ceremony at his parent’s home. Between February of 1935 and December 1940
their three children, Joyce, Harvey, and John, were born. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
The Great Depression was a tough time to be getting started
in life. Fortunately for Cliff, his
father-in-law, Bill, was a supervisor for the railroad, so Cliff was able to
get work to support his family.<o:p></o:p></div>
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<br /></div>
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In ’43, at the age of 30 and with three children at home,
Cliff was drafted, shipped to Ft. Lewis, Washington, and then on to the
Philippines. By 1946 he was home, though
during his absence, son Harvey had picked up scarlet fever, which led to
rheumatic heart disease. In 1952, at age
13, Harvey passed, creating a hole that lasted for life.<o:p></o:p></div>
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<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEia2gdrG14dXiV5TQUIh4aJAvJY45Srqf39wK3iin4K6IELPWm9bNPpgSVxRW1S7mBtTIcrogmzlJ49NzGC2a1KFKvmXMKmggrVZsdSQKlEnI7nvFL4Mt98rpdr-xNOpA4aiFY7KBoVOFw/s1600/fort+lewis.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="178" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEia2gdrG14dXiV5TQUIh4aJAvJY45Srqf39wK3iin4K6IELPWm9bNPpgSVxRW1S7mBtTIcrogmzlJ49NzGC2a1KFKvmXMKmggrVZsdSQKlEnI7nvFL4Mt98rpdr-xNOpA4aiFY7KBoVOFw/s320/fort+lewis.jpg" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><span style="background-color: black; color: #cccccc; font-family: Verdana, Arial, sans-serif; font-weight: bold;"><span style="font-size: xx-small;"> Pictures from the family of Orville Presley, <br />Battery A/124th Field Artillery Battalion</span></span></td></tr>
</tbody></table>
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Cliff was my mom’s dad, and one of my heroes in life. Two stories he shared included one about
waking up after falling asleep on the ground in the Philippines, to find a big
lizard crawling over him. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
The other story was, during Harvey’s illness, owing money to
everyone he knew because Harvey’s medicine took almost his entire
paycheck. After the war, they kept milk
cows. Grandpa would skim the cream,
store it in five gallon containers, and then take the cream to town to
trade. On one trip, something spooked
the horses, and one of the two containers of cream tipped over. Grandpa said he cried, as the cream was so
valuable to them as a trading commodity.<o:p></o:p></div>
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I could fill a book with the lessons I learned from him, or
the things he taught me. Among the
things I learned from him was how to bait and set a fishing hook, how to handle
guns, how to pitch horseshoes, how to use power tools and how to make ice cream
in a hand cranked ice cream maker. More though,
he taught me how to treat a lady and by example, how to care for family, how to
live and finally, how to die.<o:p></o:p></div>
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Many of us have been given the gift of someone like this in
our lives, whether a parent, a grandparent, another relative or simply someone
who took an interest in us and helped show us the way. Who were these people for you? Are they still living, such that you can
thank them? If you haven’t had the gift
of someone like this, could you be this person to someone else?<o:p></o:p></div>
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<br /></div>
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We stand, as John of Salisbury said, on the shoulders of
giants and to them we owe a debt of gratitude, for what they have given us and what
they have poured into our lives. It is
easy for us, then, to agree with the ancient poet who said, “The boundary lines
have fallen for me in pleasant places; surely I have a delightful inheritance.”</div>
<br />
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<br /></div>
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Quote of the week:<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
“It is surmounting difficulties that makes heroes.”<o:p></o:p></div>
<div class="MsoNormal">
Louis Pasteur<o:p></o:p></div>
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<br />
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<br /></div>
Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0tag:blogger.com,1999:blog-4636166460812013873.post-89212715709217260792016-10-17T06:51:00.000-04:002016-10-17T06:51:09.956-04:00Financial Update October 17, 2016
<br />
<div style="margin: 0px;">
<span style="font-family: Cambria; font-size: x-small;">The story of Bass Pro Shops
buying Cabela’s caused me to read more about John Morris, the Bass Pro
founder.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Springfield MO is just up the
street, 180 miles or so, from where I grew up.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;">
</span></span><span style="font-family: Cambria; font-size: x-small;">Fresh water fishing is abundant in the lakes, ponds, and coal pits of
Southwest Missouri, Northwest Arkansas, Southeast Kansas, and Northeast
Oklahoma.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">Those stories of John Morris as a
young man brought back many memories from decades ago.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">In decades past, coal mining companies in NE
Oklahoma would simply dig a hole for the coal beneath the surface, piling the
dirt on the ground above.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Once the coal
was mined, the pits were left open, and were primarily on private land.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">These pits filled with water, and held some
of the largest large-mouth base I’ve seen.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;">
</span></span><span style="font-family: Cambria; font-size: x-small;">These coal pits dotted the landscape and offered excellent fishing.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">You simply had to know where they were, and
you had to have permission from the landowner to fish the coal pits.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">My cousin Bobby knew where all
the coal pits were, and he knew the owners.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;">
</span></span><span style="font-family: Cambria; font-size: x-small;">He and I spent many summer afternoons in a flat bottom boat, fishing
those coal pits.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">The memories are hazy
at this point, and get better with age.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;">
</span></span><span style="font-family: Cambria; font-size: x-small;">It seems though, that I recall the sounds of silence, a beautiful golden
sun, and the anticipation of the bobber suddenly plunging into the water, as a
5 to 8 lb. large mouth locked on for a snack.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">Those memories are unique to a
specific time and place.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">But you have
your memories of those years, which bring a smile to your face.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">What are they?</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">You are welcome to share them with us,
fishing story or otherwise, if you are so inclined, at </span><a href="https://centurionag.blogspot.com/"><span style="color: blue; font-family: Cambria; font-size: x-small;">https://centurionag.blogspot.com/</span></a><span style="font-family: Cambria; font-size: x-small;">.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">In other news, let’s talk
portals, which we referenced in our April update.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Over the years, the transfer of documents has
occurred by courier, by U.S. Mail or other post, by fax, and by email
attachment.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">All of these methods remain
available to all of us.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">The documents we
send to you, and that you send or transfer to us, need to meet two criteria, we
believe.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">First, transmission needs to be
secure.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Second, the transmission tools
need to be relevant.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">From a security standpoint,
courier and post are the least secure, followed by unsecure email
attachments.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Faxes and secured email
attachments are more secure.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Portals,
with good security protocols, provide the highest level of security, and offer
an interface that is familiar to all of us. </span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">You may always, if you choose,
drop information in the mail.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">That will
remain a tried and true method to get information to us.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">When we receive the information, we scan the
documents, and shred the hard copies.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">We
have had a fax number for many years, and will retain it.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">We have been using secure file transmission
through Sharefile for two or three years, and we will retain the use of
Sharefile for secure file transmission for another two or three years.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">Going forward, any communication
we prepare for you will be posted to your portal.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">For households, this would include documents
such as quarterly reports and annual reviews.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;">
</span></span><span style="font-family: Cambria; font-size: x-small;">The portal could also contain folders for financial statements, tax
returns, insurance details, and other documents which touch your finances and
our work together.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">For non-profits, this
would include documents such as quarterly reports, annual reviews, and
Investment Policy Statements (IPS).</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">For
plan sponsors, this would include documents such as your Plan Document, Summary
Plan Description, Adoption Agreement, IPS (if applicable) Form 5500, our annual
review, and committee meeting notes.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">We will also prepare hard copies
for any meetings we have with you, until such time as you and we are
comfortable reviewing this communication in electronic form.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Note that there will be no “requirement”
that you use the portal for document transmission, though we will be promoting
its use.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">How we receive documents will
be left to your discretion, and it is easy for us to manage these documents,
regardless of how we receive them. </span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">Beyond the security of the portal
though, is its relevance.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Just about all
of us, when we are looking for information, or needing to take action,
logon.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Many of us logon to check our
bank or other financial institution balance from time to time.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Many of us have also chosen to forego paper
statements, instead opting for an email alert that our statements are ready.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">Whether it’s making airline
reservations, checking our bank balance, making dinner reservations, receiving
results from the doctor, or so many other uses, the first step seems to be
entering a pin and password from our smartphone, tablet, laptop, or
workstation.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">The portal offers the same
environment.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">If you have already registered as
a portal user, you may access your portal by going to </span><a href="http://www.centurionag.com/"><span style="color: blue; font-family: Cambria; font-size: x-small;">www.centurionag.com</span></a><span style="font-family: Cambria; font-size: x-small;">, and going to Client
Login, at the top right corner of the page.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;">
</span></span><span style="font-family: Cambria; font-size: x-small;">If you haven’t registered as a portal user yet, let us know, and we will
send you the link to do so.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">And, this is
a collaborative work.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">As you use the
portal, give us your feedback.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">Also, let
us know what features you think would be useful, and any feedback about how we
structure the sections.</span><span style="margin: 0px;"><span style="font-family: Cambria; font-size: x-small;"> </span></span><span style="font-family: Cambria; font-size: x-small;">This space is
new enough that the vendor partners we use are very receptive to design feedback.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">We look forward to hearing from
you.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">Until next month.</span><span style="font-family: Cambria; font-size: x-small;"> </span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">Randy Brunson</span></div>
<br />
<div style="margin: 0px; text-align: justify;">
<span style="font-family: Cambria; font-size: x-small;">For the Centurion Team</span></div>
<b></b><i></i><u></u><sub></sub><sup></sup><strike></strike>Randyhttp://www.blogger.com/profile/06281006112642660366noreply@blogger.com0