Helping you achieve your personal vision based upon your individual needs, goals and risk tolerance..

Happiness

Are successful people happy because they are successful or because they are happy? Science and personal experience suggest the latter. The idea that if we just make more money, do more things or land a new position at work will make us happy is misleading at best. At worst, it leads to disappointment. The idea that we control how happy we are — regardless of circumstances — and ultimately control our own success may be hard to believe, but it is true.

Study the Exceptional to Be Exceptional

Averages are the benchmarks scientists analyze for most things. The measure of happiness, although tough to define, is no exception. But if we study what is merely average, we will remain merely average. If we want to be exceptional, we need to study the exceptional. This is true with our health, happiness and financial well-being. The good news is that success leaves clues.

Shawn Achor is the author of the best-selling book The Happiness Advantage. He spent 12 years researching happiness at Harvard University. Mr. Achor postulates that when we stop studying the average and begin researching positive outliers —- people who are above average for a positive dimension like optimism or intelligence — a wildly different picture emerges. Our daily decisions and habits have a huge impact on our levels of happiness and success. More importantly, we can use specific exercises to increase our level of happiness and thereby our success (however we define it).

So again, are successful people happy because they are successful or because they are happy? There are many unhappy people who society deems successful. Take students at Harvard who have the opportunity to attend one of the greatest learning institutions and who are generally very smart folks. Many of them feel that they are not successful if they are not in the top 1 percent of their class — 99 percent of them will potentially be disappointed.

Change Requires Desire, Decisions and Doing

The first thing we must do is change our behavior to see the positive. If I want something I’ve never had, I must do something I’ve never done. The truth is…change involves desire, decisions and doing. A change of mind results in a change of heart, which results in a change of action, which results in a change of feelings. All of that can be a little scary…doing something you’ve never done. So heed the advice of educator L. Thomas Holdcroft: “The past is a guidepost, not a hitching post.”

On the other hand, things I do not take action on are probably not going to change. You may whine and complain about your weight, your spouse, your kids, your job, your team or letting your phone and email ruin your life. But as much as I hate to say this, you have no right to complain about any of those things if you don’t do something about them and just keep on permitting them to happen.

Mind-Wandering Makes Us Unhappy

Worry is negative goal setting — thinking about everything that has or can go wrong. To worry about what you can’t change is useless. And to worry about you can change is a waste of time. Either change it or forget it. Self-improvement guru Dale Carnegie said, “If you can’t sleep, then get up and do something instead of lying there and worrying. It’s the worry that gets you, not the loss of sleep.”

Even when we are awake, a recent study showed that people spend 46.9 percent of their waking hours thinking about something other than what they’re doing, and this mind-wandering typically makes them unhappy. So says a study that used an iPhone web app to gather 250,000 data points on subjects’ thoughts, feelings and actions as they went about their lives.

The researchers, psychologists Matthew A. Killingsworth and Daniel T. Gilbert of Harvard University, concluded, “A human mind is a wandering mind, and a wandering mind is an unhappy mind. The ability to think about what is not happening is a cognitive achievement that comes at an emotional cost.”

Positive psychology is “the scientific study of optimal human functioning.” It was first introduced as a field of study by Dr. Martin Seligman in 1998, when he was president of the American Psychological Association.

Traditionally, psychology has concerned itself with what ails the human mind — such as anxiety, depression, neuroses, obsessions, paranoia and delusions. But Dr. Seligman and other pioneers in positive psychology asked the following question: “What are the enabling conditions that make human beings flourish?”

You Can Learn to Be Happier—Start Today!

Here is more good news: positive psychology shows that you can learn to be happier just as you can learn a foreign language or become proficient in a sport. This rapidly growing field is shedding light on what makes us happy, the pursuit of happiness and how we can lead more fulfilling, satisfying lives.

We recommend reading the books below, which go into more detail about things you can do to improve your happiness. And to get started on your quest for happiness right away, here are a few exercises to consider:

  • Ask yourself questions to foster awareness about what actions and attitudes will make you happier.
  • Keep a happiness journal. Each day, write down three things you are grateful for. This will help you look for things in your life that make you happy.
  • Every day, send a personal note to someone who has positively impacted your life.
  • Imagine yourself as 110 years old. Write down the advice you would give your younger self. This added perspective will allow you to recognize and eliminate trivial and negative things from your life.
  • Follow the suggestion Dr. Tal Ben-Shahar makes in his book Happier: create rituals or daily habits. He says, “The most creative individuals — whether artists, businesspeople or parents — have rituals that they follow. Paradoxically, the routine frees them up to be creative and spontaneous.”
  • Simplify. Identify what’s most important to you, and focus on that; stop trying to do too much. People who take on too much experience time poverty, which inhibits their ability to derive happiness from any of the activities they participate in.
  • Keep in mind that happiness is mostly dependent on your state of mind. Barring extreme circumstances, our level of well-being is determined by what we choose to focus on and by our interpretation of external events.

We definitely want to be content and appreciative of our current situations, but we should also continue to grow. As content as you are, you can be happier each day. Happiness is a journey, not a destination, and we need to balance having what we want with wanting what we have. Please contact me, or our team, whenever we can help make your life better. Randy Carver – randy.carver@raymondjames.com  or (440) 974-0808.

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Books to read on the subject:

  • Shawn Achor, The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work
  • Dr. Tal Ben-Shahar, Happier: Learn the Secrets to Daily Joy and Lasting Fulfillment

Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. The information herein has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.   Links are being provided for information purposes only. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s user and/or members.

Why Are You Investing?

Why are you investing? Is it to beat an index or achieve a personal goal? Is it to select the newest investment or achieve a dream? Most of us are investing to achieve a personal goal or fulfill a need such as having retirement income, funding education funding, going on a vacation or remodeling a home.

While many firms focus on selling the latest investment or trying to beat a benchmark, we focus on you and achieving your vision. Rather than taking an investment-centric approach that looks at the portfolio and tries to determine how your life can be, we want to understand what your personal vision is for the future and then develop a holistic plan to achieve it. The investments themselves are simply a means to an end. We call this Personal Vision Planning®.

Focus on Your Vision, Not on Market Performance

The most important benchmark is whether you can maintain and enhance your standard of living, not some market index. Performance should focus on your needs, wants and vision — not a random number or value. Markets will go up and down, but don’t focus on that — focus on your personal vision.

As broader markets have set new record highs, many investors are comparing the performance of their portfolios against various market indexes. In most cases, people’s portfolios do not contain the same investments as the index they are comparing themselves to, so the comparison is irrelevant.

Asset Allocation Is More Important than Selection

Asset allocation is the practice of mixing non-correlating assets together to find an optimal balance of risk and return based on your investment profile. The idea is to minimize your portfolio risk while maximizing your returns.

Asset selection, or securities selection, is the practice of building your portfolio with a variety of investments that align with your asset-allocation strategy.

According to an industry consultant with 30 years of experience in the financial services industry, “While both asset allocation and selecting appropriate securities is important to an investment strategy, it is more important to target the right asset allocation” (Investopedia, September 3, 2016). Studies have shown that asset allocation can account for more than 90% of your return (CFA, Randolph Hood, and Gilbert L. Beebower (known collectively as BHB), “Determinants of Portfolio Performance,” published in the Financial Analysts Journal).

We agree that asset allocation is the most important factor in determining your investment success — not investment selection. We have a rigorous process for screening, selecting and monitoring investments. This is the science. Developing an allocation and broad plan based on your personal goals, vision and needs is the art.

Leave Emotions Out of Financial Decisions

Regardless of what transpires, we are here for you. Chasing past performance or making decisions based on emotions has led to significantly reduced returns for many people. This is why the average equity mutual fund investor underperforms the average fund by about 40 percent over 20- year periods (Nick Murray Interactive, April 2017).

For more information about our process and team, visit www.carverfinancialervices.com, or feel free to contact me personally at randy.carver@raymondjames.com.

Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. The information herein has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Diversification and asset allocation do not ensure a profit or protection against a loss. Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss. Links are being provided for information purposes only. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s user and/or members.

The Election, Trump Bump and You

We experienced a major surprise with the election and also the market’s reaction on the days following (November 9th and 10th).   The 2016 Presidential campaign was unlike anything we have ever seen.  We have to go back to 1948 to see such a surprise election result.  The reaction of the markets was unprecedented as well; following the surprise election of Donald Trump as America’s 45th president. The final polls were close going into Tuesday’s voting,  however, few polls or pundits presented a real probability of Donald Trump winning. Over the last sixty years there have been a number of close election nights featuring the likes of Kennedy-Nixon, Carter-Ford, and Bush-Gore yet  one would have to go all the way back to 1948 and Harry Truman’s upset of Thomas Dewey to find a contest in which the expected winner and loser so dramatically reversed fortunes over the course of just a few hours.

Overseas and pre-market trading here in the U.S.   were caught off-guard. However, what transpired in the day to follow provided perhaps even more of an unexpected turn. As Trump’s victory became increasingly apparent throughout Tuesday night’s vote count overseas markets plunged and Dow Jones futures sank to the tune of more than 800 points. In our opinion, this initial reaction was one of uncertainty rather than any great concern in our overall economic or financial system. It was eerily reminiscent of the market’s reaction to Brexit last June, both in terms of magnitude and speed of decline. As fears of a market crash were bantered about amidst the election coverage, the day to come looked like it would certainly be a rough one for investors. Keeping with the element of surprise, stocks opened close to flat Wednesday morning and then quickly turned positive. Momentum built throughout the day with the Dow closing +256 points (1.4%). The S&P 500® and NASDAQ also moved higher by more than 1% leaving many to wonder how one trading session could reverse course seemingly just as quickly as had the fates of Trump and Clinton the night before. How did this happen?

A few thoughts:

  • Investors realized, much like after the Brexit, that there are few investment alternatives to the US markets that can provide the same total return potential.
  • Recognizing that the White House and both chambers of Congress would all soon be under Republican control, the markets contemplated the prospect of less government gridlock, reduced regulation, and lower corporate tax rates.
  • Individual sectors of the market quickly reacted extremely favorably to potential industry specific changes under the new administration. This included bank stocks which rose on average about 5% as the prospect of a steepening yield curve and less government regulation was well received, and biotechnology stocks, which on average jumped close to 9% as concerns of Clinton induced drug pricing constraints fell by the wayside.
  • There was speculation regarding the tenure of Fed Chair Janet Yellen under the new administration and that Mr. Trump’s first appointments to the Fed in early 2018 would likely be more hawkish than the committee’s current composition.
  • The rapid flip flop of the markets illustrated the futility and difficulty of trying to time or predict market behavior. This reinforces our long term belief that the key to strong long term returns is a diversified allocation based on your needs.  Pundits and market predictions should not have any impact on your re balancing or investment timing.
  • Finally, we believe this as important a time as any in recent memory to maintain a long-term investment focus. While we have just experienced an election unlike any other since the days of our grandparents, history has nonetheless shown that markets ultimately follow economic and profit cycles rather than political ones.

Donald Trump has been extremely vague on policy; therefore the details of his plans are not well understood. However, we feel there are clear “big picture” items from his platform which can be placed in three categories:

Promote growth (tax reform, repatriation of foreign cash, stimulus spending, lower regulations)

Increase isolationism (anti-trade, anti-immigration, against foreign aid/military spending)

Repeal and replace Obamacare

With the Republican sweep in the U.S. Congress, we think it is logical to focus on where Trump has common ground with the Republican establishment to look for items which will be the focus for the first 100 days of the Trump administration

The uncertainty regarding the extent to which Trump will move forward with his electoral promises will probably maintain a degree of volatility in markets. After Brexit, the results of the U.S. elections continue to push toward more protectionism and isolationism.    It remains to be seen what actual policy the new administration puts forward and how successful they are in getting it passed.  We believe that we will see rising interest rates, federal debt and inflation but also rising markets.  Those who are properly allocated and maintain reasonable expectations for return and withdrawals while ignoring short term swings should benefit.

Our team is here for you and your family and looks forward to discussing any questions or concerns you may have.  As we look to 2017 we continue to take a customized approach to investing and planning for each client- we do not utilize models or proprietary funds.  A proactive holistic approach will, in our opinion, become even more important as we see more volatility and regulatory complexity.  Please contact us whenever we may be of service.  randy.carver@raymondjames.com  or (440) 974-0808.

This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Opinions expressed are those of Randy Carver and are not necessarily those of RJFS or Raymond James. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Asset allocation and diversification do not ensure a profit or guarantee against loss. Re-balancing a non-retirement account could be a taxable event that may increase your tax liability. The example provided is hypothetical and has been included for illustrative purposes only. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary. Past performance does not guarantee future results. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow”, is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.

The Wildcard

Elections come and go, pundits discuss markets, and the media often shouts how bad the world is.  The three main things that the media says are threatening us  (a global epidemic, war in the middle east and coming problems with our economy)  have not changed for 100 years. The ironic thing is we hear little about the one wildcard that improves our lives, our economy and our country and when presented this too is often discussed as a threat to our way of life.  Over the last 100 years there have been global pandemics (tuberculosis, polio, AIDs, Ebola, bird flu etc.); terrorist events (pearl harbor, the USS Cole, The World Trade Center, etc.) and natural disasters. What we don’t hear about though is how much technology impacts us positively.

Regardless of the political climate, or how the economy is doing one wildcard has always been technology.  Technology can increase efficiencies, create new markets and create new demand for goods and services while shaping entirely new industries.  The cool thing is that the pace development and invention continues to grow exponentially.  Focusing on politics, economics or social issues can lead one to miss some of the most important developments for each of us personally and our country generally.  New technologies continue to change the way we live, work and play and in so doing generate new jobs and opportunities.

Think about just the last 14 years    Camera  phones were introduced to the North American marketplace in 2002, an estimated 80 million camera phones were sold in 2003.    In 2003 the iPod was brought out and in 2004 DVRs and Facebook went live for the first time.   In 2005 YouTube was created and opened to the public.  The original smartphone first hit store on June 29, 2007 just nine years ago.  On a snowy Paris evening in 2008, Travis Kalanick and Garrett Camp had trouble hailing a cab.  So they came up with a simple idea—tap a button, get a ride. Uber was born.   The iPad was introduced in 2010 and then in 2011 Siri.   Just to name a few. Do you use any of these technologies?  Have they positively impacted your life.

New technology creates new paradigms for everything from shopping to travel.  Consider all of the business’ that have been built around eBay and now Uber.  Think about how airBNB has grown the lodging and travel market or how ubiquitous smart phones are.  As we see more innovation and new ways of doing things new jobs are created.

We believe that the pace of this innovation will continue.  Moore’s law refers to an observation made by Intel co-founder Gordon Moore in 1965. He noticed that the number of transistors per square inch on integrated circuits had doubled every year since their invention. Moore’s law predicts that this trend will continue into the foreseeable future. This is used as the current definition of Moore’s law. On a broader scale technology generates new technology – for example Uber would not exist if we did not have smartphones.

We cannot predict exactly what new technologies will be developed or how they will impact our society.  We do know that new technologies will change (for the better) how we live and continue to generate opportunities for those who take advantage of them.  The future is incredibly bright in this regard.  This is a key wildcard for the future of our economy and country.

At Carver Financial Services Inc.  we  believe is using cutting edge technology to help manage your wealth and vision planning as well as communicating with you.  Each year we hold a Resource Breakfast’ to discuss what resources are available to you.  You are invited to join us on January 14th, 2017 for this year’s event.

There is a place for high tech and a place where people make a difference.  While many firms are moving to more automation for everything from phone calls to portfolio’s we continue expand our team of people.  We do not believe that technology can replace the care and understanding that a person can provide.   We have continued to expand our service team to better serve our clients and do not utilize things like robo-advising, model portfolios or limited investments.   The unique synergy between our team and the utilization of technology where it is best deployed creates a both a personalized and efficient experience to  best serve you.   We have developed and refined a process for helping you that takes advantage of high tech while providing a personalized high touch experience.

The media will often focus on the negative in most things including technology.  No doubt the headline when the first light bulb came out was “death of the candle industry”.   We believe that tech will continue to improve our lives, our economy and our country.  Those who take advantage of it will benefit while those who do not will be left behind.   We look forward to having you take advantage of the new resources coming in 2017 and beyond.  Feel free to contact me personally – randy.carver@raymondjames.com or (440) 974-0808.
 

This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Opinions expressed are those of Randy Carver and are not necessarily those of RJFS or Raymond James. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Asset allocation and diversification do not ensure a profit or guarantee against loss. Re-balancing a non-retirement account could be a taxable event that may increase your tax liability. Past performance does not guarantee future results.  No specific tax or legal advice is given or intended.

How To Survive the Coming Market Crash

It really is not a question of if the markets will drop in the future but when.  The more relevant question is how it will affect you.   While we cannot control what the markets do we can control how we react to volatility and potentially what impact it has on us.    Market drops are a regular part of the longer term investment cycle and we expect always will be.  There are those who are not hurt or even benefit from market drops and there are those are negatively impacted.  In many cases the choice is largely yours.

Most people who lose assets do so because they panic and sell.    This is because they are fearful or because they were not prepared financially or psychologically.   Understanding that markets will drop and being prepared is the key to benefiting from this.  When things continue to do well, has they have over the last seven years,  it is easy to invest in a manner that exposes us to more risk than we might otherwise take because things are doing well.    We always recommend a diversified allocation based on both your needs and risk tolerance. This should include six months’ worth of living expense in cash or short fixed income investments so that you can ride out short term market corrections.

We are often asked if we know the markets will drop why we don’t just go to cash and wait.  The fact is that it is impossible to  time market dips and also when to get back in.  Missing just a few of the best days will have a significant impact on your long term performance.  For instance if an investor invested $10,000 in the S & P 500 in 1995 through 2014 they  would have had an annualized return of 9.85% and their $10,000 would have grown to $65,453.  Had they missed just the ten best days their return drops to $32,665 and if they had missed just the fifty best days over those ten years they would have actually lost money with their investment dropping to $6,392 (Source Business Insider 3/12/15 – 10 Best Days.)

What should you do?

  1. Do not try to time markets
  2. Monitor your portfolio and rebalance as appropriate
  3. Have on hand enough cash for short term needs
  4. Be reasonable in your expectations for both growth and also negative periods

The role of a good financial advisor is not so much selecting investments but helping you develop a plan that meets both your needs and your risk tolerance and then sticking with it – in good times and bad.  The right advisor will help you from becoming too aggressive when markets move up or moving away from a good plan when they go down.

Feel free to contact us without cost or obligation to discuss your vision.  Even if you are  working with an advisor we are happy to provide a second opinion.  Our team has more than 150 years of combined experience and is here for you.    You can reach us at (440) 974-0808 or feel free to email me at my personal email address randy.carver@raymondjames.com .

 

 

This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Opinions expressed are those of Randy Carver and are not necessarily those of RJFS or Raymond James. Investing involves risk, investors may incur a profit or loss regardless of the strategy or strategies employed. Asset allocation and diversification do not ensure a profit or guarantee against loss. Re-balancing a non-retirement account could be a taxable event that may increase your tax liability. The example provided is hypothetical and has been included for illustrative purposes only. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary. Past performance does not guarantee future result

Have a Safe Flight

When we book an airline ticket we want to get from where we are to our destination as quickly and easily as possible with the least amount of cost and hassle.   We understand that some airlines include things like checked bags whereas some do not and that there are different routes we can take based on our schedule, budget and destination.   Ultimately we expect all airlines to get us to the destination safely and that they meet basic mandated guidelines.  For example the airline is expected to inspect and maintain the aircraft based on FAA guidelines.

The pilot will check the plane for mechanical issues, before departing but we understand he did not build the plane and that things may come up that are unforeseen.   There may be weather issues that cause delays or a change in routing.   We understand that delays that are related to the weather, or due to a mechanical issue,  are beyond the control of the pilot or airline.  What we expect is that they safely get us to our destination as efficiently as possible given the challenges and events that come up.

The same things are true with your financial planning. You are hiring your advisor and his or her firm to get you from where you are to a financial destination as quickly and easily as possible with the least amount of cost and hassle. The route you take will be based your needs, schedule and ultimate destination (goals).   It is very important to understand that the advisor did not build the investments being used to get you to where you are going,  just as the pilot did not build the plane.  While the advisor has done their due diligence (pre-flight inspection) unforeseen events may occur.   For example a fund manager may leave or an investment strategy may change.  There may be a natural disaster or terrorist event that impacts markets in general and therefore portfolios.   This is not the fault of the advisor (pilot).  Their job is to identify the problem, notify you and then act accordingly to get you to your ultimate destination as safely and close to schedule as possible.    We plan for what is expected and also for contingencies when emergencies occur as part of our proactive process.    When something does arise our role is to deal with it and get you to your destination as safely as possible.  This is also where an experienced flight crew or financial advisory team can make a difference.

When selecting the airline, or even private charter, there are dozens of choices; just as there are with financial firms and advisors.  Some discount airlines provide bare-bones service but often have other fees such as for carry-on bags, selecting a seat or checked bags that are included with a full service airline.   Understanding what the fees are and what you can expect from the airline is key.  The same is true of your financial advisor.  Understating what the cost to work with them is, and what you can expect in return is important.   Moreover, if you book a first class ticket or private charter you will receive perks that you will not get with a discount airline.

We generally utilize a flat fee based approach for clients based on assets managed.  We believe this provides the most transparency about what you are paying and also the most flexibility to make adjustments when unforeseen issues arise.   This approach allows you to make changes or get cash without penalty or transaction expense.

We will design a custom route based upon your specific goals, needs, risk tolerance and overall vision. We have developed and refined a process to work with you in developing, implementing and monitoring a plan this is based on your vision.  We then utilize a proactive approach to managing income, taxes and other factors that are important to you.  Please feel free to contact us, without cost or obligation, to discuss any questions you may have.  Safe travels!

 

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and investors can incur a profit or loss regardless of strategy selected. You should discuss any tax or legal matters with the appropriate professional.  In a fee-based account clients pay a quarterly fee, based on the level of assets in the account, for the services of a financial advisor as part of an advisory relationship. In deciding to pay a fee rather than commissions, clients should understand that the fee may be higher than a commission alternative during periods of lower trading. Advisory fees are in addition to the internal expenses charged by mutual funds and other investment company securities. To the extent that clients intend to hold these securities, the internal expenses should be included when evaluating the costs of a fee-based account. Clients should periodically re-evaluate whether the use of an asset-based fee continues to be appropriate in servicing their needs. A list of additional considerations, as well as the fee schedule, is available in the firm’s Form ADV Part II as well as the client agreement.

Anyone can fly when the plane is on autopilot

When the autopilot is engaged anyone can sit in the cockpit and the plane will continue on course – this doesn’t make the person a pilot.  Nor do they need to be.  When there is an issue with the aircraft, the weather changes or we need to land then we need someone with the skills and experience to deal with the situation.  Would you rather be on a plane with a pilot or without?

When markets continue to move up in a relatively stable fashion most investments l move up and anyone can feel like they are doing a good job with their wealth management.  It is when the markets become volatile, there is an issue with a specific investment or the economy changes that a skilled and experienced financial professional can add value.   As your needs, and the world’s changes, one of the keys to your success is being proactively prepared, rather than having to react when it may be too late.   This is just one of the ways a skilled and trained professional can help you reach your financial goals safely and on time.  Our role is to help you achieve your personal vision – not to  pick investments.  We believe in a holistic approach to planning which incorporates anticipated needs and goals and helps prepare for the unexpected.  We want to makes sure that your tax, legal, investment and estate planning all align so that we can develop the best solution for your personal situation.  The investments are simply tools for achieving you vision much like an airplane is a tool for getting from point A to point B.

Just because the markets are on autopilot doesn’t mean you should be your own financial advisor or  base your expectations on the last couple of years performance.  An experienced and qualified advisor can help you achieve your vision over the long term.   As Warren Buffet famously put it “it’s only when the tide goes out that we see who is swimming naked”.  The time to engage with a professional is when you are serious about your future – not when there is a crisis.   As with a pilot experience matters – do you want someone who has been flying for fifty hours or someone who has 10,000 hours experience.   Our team has more than 135 years of combined experience and is here to serve you.  Please contact us to discuss your personal needs and vision and we will partner with you to develop and monitor a plan that makes sense for you.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Randy Carver and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and investors may incur a profit or a loss. There is no guarantee that using an advisor will produce favorable investment results.

Bad News & Violent Crime

It seems that everyone time we turn on the news we hear or read about more violent crime.  The country just seems to be coming apart.   This is one of the major issues that both presidential candidates are focusing on.  The reality is that violent crime continues to dramatically drop in the United States – not increase!  Our perception is being impacted by the news media focusing more on crime, and in a more dramatic way.  This often creates the perception that we are living in a war zone.   The reality is that According to the FBI 1     violent crime has decreased dramatically over the last twenty years!

There were 23,326 murders in the United States in 1994 and 14,196 in 2013.  Not only did the number of murders drop by more than 40% – at the same time the US population grew from 260,327,021 in 1994 to 316,128,839 so not only did the number of murders drop the rate dropped from 9 per 1,000 people to 4.5 per 1,000.2   Moreover, we do not hear about all of the good things that law enforcement is doing.

Similarly on June 28th immediately after the so called Brexit vote, the headline was “World markets lost $3 trillion in the two days of trading following the United Kingdom’s Brexit vote.”2.  What we did not hear was that the markets increased by more than $3 trillion in the weeks following.  In fact In the two weeks following the Brexit vote the major market indices moved up more than 7% and set several record highs over the next few weeks.

It’s critical to understand that the media will focus on the negative and short term.  With increased competition for viewers and readers the main stream media uses fear, drama and negativity to get people to tune in.    A trusted advisor can help you navigate the sea of information and remain focused on your long term plan.  The role of the trusted advisor is not so much to select investments but to help you develop, enact, monitor and update a plan based on your needs, goals and vision.  The advisor can sort through what information is relevant to you and what is just noise. Beyond helping you develop a sound plan based on your needs a trusted advisor can help you avoid making poor decisions based on fear and emotion rather than facts.

Do we face challenges in society and with regard to investing?  Absolutely.  Are things as terrible as the media would have us believe – certainly not.  There are tremendous potential opportunities to help build wealth and maintain our standard of living  today.  A  trusted advisor can help you to take advantage of these while avoiding the various pitfalls that we face.  Feel free to contact us without cost or obligation to discuss your personal needs and vision.    Randy Carver (440) 974-0808 or randy.carver@raymondjames.com

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and investors can incur a profit or loss regardless of strategy selected.
1. https://ucr.fbi.gov/crime-in-the-u.s/2013/crime-in-the-u.s.-2013/tables/1tabledatadecoverviewpdf/table_1_crime_in_the_united_states_by_volume_and_rate_per_100000_inhabitants_1994-2013.xls
2. http://www.aol.com/article/2016/06/28/world-markets-lose-3-trillion-after-the-brexit-vote/21420545/

It’s Different This Time- Brexit and more

With the so called Brexit vote we are once again being told that the future is uncertain and we should worry because ‘this time it’s different’. Whether real or imagined the stock markets will often react based on perceptions. It is then that we hear the refrain “it’s different this time” – it really never is. Events change but markets react for the same reasons. Warren Buffet famously said that the four most dangerous words for investors are: this time it’s different. Viewing an event as different can cause us to liquidate investments, fail to make important decisions or simply stop investing.

The media fights to fill a never ending news cycle and politicians need a crisis to justify their existence and re-election.   We are inundated with bad news, some based on fact and some simply hype. The current market dip as a result of the Brexit is typical of the reaction to an unforeseen event. Moreover, we often hear about the negative impact of events but not the subsequent recover. For example CNN had the headline (one June 28th) ‘Brexit Crash wiped out a record $3 trillion. Now what?”. The now what was that in just a week or so after much of the money was back because markets rebounded.

So what can we expect in the coming months? While nobody knows exactly- frankly what markets, and portfolios do in the short term should not matter. We believe that the Brexit, and uncertainty with Europe, may ultimately help the United States as investment moves out of Europe to the U.S. Our labor cost is roughly half of that in Europe, our energy cost is less than half and there are big tax advantages for non-US companies. In the near term, however, we will continue to see volatility and as we have more media there is more media attention.

Markets have prevailed when shaken by crisis in the past and rewarded investors who have the courage and insight to stay invested and when able to add to positions. Although past performance does not guarantee future results, the Dow was at approximately 117 when Pearl Harbor was attacked, fell 20% to 93 by early May 1942 and then rallied to 145 by July 1943. In August 1962, at the time of the Cuban Missile Crisis, the Dow was at 615. It fell to 550 in October and then rose to 650 in December and 767 by December 1963. At the beginning of the 1982 the DOW was at 700 and by 1992 the DOW was at 3100 (source stock charts.com).

Looking more recently consider that in 2013 we had a series of negative events ranging from a government shutdown to war in the middle east. Despite many dips including a 7.5% drop in May the markets climbed by almost 30%. This is typical of what we have experienced over the last 50 years. Long term investors should remember that it’s normal to see pullbacks of 10% or more during bull markets. In fact, we’ve seen the S&P 500 correct by at least 14.7% five times since 2000, only to eventually make its way higher. The short-term interruptions in the markets can present attractive buying opportunities for investors who have a well-diversified plan in place.

Today our economy is still the envy of the world. We have historically low interest rates, low energy cost and little inflation. American companies are more efficient than ever before, are earning record profits and have record amounts of cash. America is the world leader in production and utilization of technology.

These reasons suggest sticking to your long-term financial plan now more than ever. You’re investing for a lifetime – not for a week, a month or even the duration of the fight against terrorism. Unfortunately, what is seen as a positive indicator one day is discounted the next, which can be very confusing. Those constantly conflicting stories may be of interest to day-traders, but not to me and, hopefully, not to you. Instead of listening to the hype, we focus on you and your needs. That’s the information we need to make well-thought-out long-term investment decisions based on your personal vision, needs and goals.

While the internet, newspapers’ business headlines and TV financial talk shows can be entertaining, they often cause us to divert our concentration from our real objectives which may include maintaining our lifestyle, protecting against unnecessary taxation and passing on wealth to our heirs. We need to understand that with increased media there is increased competition for viewers and readers. Media is big business and companies seek to generate profits by attracting viewers. They do this with sensational headlines that often seek to scare us as much as entertain; but which may not truly inform.

Our advice is to generally ignore the media when it comes to news about individual companies’ performance or how events have negative influence on the markets.   Hopefully you will not let the headlines upset you as you begin to understand that they are meant to gain viewers, not to advise investors. The Brexit is just another event that we believe is like Y2K, the lowering of the US Credit Rating or Pearl Harbor. The Brexit is new but not different in terms of market behavior.

As always we are here for you. Please contact us with questions, concerns or whenever we can otherwise be of service.

 
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Investing involves risk and investors can incur a profit or loss regardless of strategy selected. Inclusion of indexes is for illustrative purposes only; investors cannot invest in an index directly. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.

ELECTIONS, MARKETS & YOU – Is this Alice in Wonderland?

Every four years the pundits and talking heads like to discuss the impact of elections on markets.  While we always need to keep in mind that past performance doesn’t guarantee future results this is perhaps truer with this election cycle than ever before.

This year’s election seems like Alice in Wonderland as we have two very non-traditional candidates in Bernie Sanders and Donald Trump who strangely share some similar ideas despite being polar political opposites as a self-proclaimed socialist and ultra-capitalist.   Both candidates, especially Donald Trump, make comments that would in the past have eliminated them from the election but this year seem to increase their popularity.

“But I don’t want to go among mad people,” Alice remarked.
“Oh, you can’t help that,” said the Cat: “we’re all mad here. I’m mad. You’re mad.”
“How do you know I’m mad?” said Alice.
“You must be,” said the Cat, “or you wouldn’t have come here.”
― Lewis Carroll, Alice in Wonderland

As Mark Twin is attributed for saying “History doesn’t repeat itself but it often rhymes”.  So before looking at where we are today here is some historical perspective.  

Wars,  bear markets and recessions tend to start in the first two years of a president’s term, says The Stock Trader’s Almanac; bull markets mark the latter half.  Since 1833, the Dow Jones industrial average has gained an average of 10.4% in the year before a presidential election, and nearly 6%, on average, in the election year.  By contrast, the first and second years of a president’s term see average gains of 2.5% and 4.2%, respectively. A notable recent exception to decent election-year returns: 2008, when the Dow sank nearly 34%. (Returns are based on price only and exclude dividends.)  In the 22 president elections since 1928, 14 were preceded by gains in the three months prior. In 12 of those 14 instances, the incumbent (or the incumbent party) won the White House. In seven of eight elections preceded by three months of stock market losses, incumbents were sent packing. Exceptions to this correlation occurred in 1956, 1968 and 1980.

Having said all of that not only is this Presidential race is unique but the entire election cycle is not consistent with past experience.  The Dow Jones Industrial Average was up 27% in the first year of President Obama’s second term, and 7.5% in year two. Last year (2015), which was supposed to be the strongest of the cycle, saw the Dow industrials drop 2% helping to prove why past performance doesn’t guarantee future results.

In terms of which party may be better for the markets conventional wisdom might suggest that Republicans, who are supposedly more business-friendly than the Democrats, would be more beneficial.   In fact, looking back to 1900, Democrats have been slightly better for stocks, with the Dow up an average of nearly 9% annually when the Democrats are in control, compared with nearly 6% per year during Republican administrations.

One popular theory suggests that the incumbent party leverages economic policies to give the market a slight nudge just before election time, then allows the market to appropriately correct itself once elections are over. Another theory proposes that investor confidence tends to rise based on the lofty promises of candidates vying for office, then tapers off as some of those promises fall by the wayside.

Regardless of which theory, if any, you choose to believe, it’s important to remember that traditional fundamentals, and public perception, always impact markets. Isolated factors such as political elections never explain the whole story.  More importantly, in our opinion, predicting what the broader markets will do is not only difficult but not relevant for people who have a strong comprehensive plan.   Proper proactive planning should take into account both anticipated volatility and unforeseen events so that they will not affect your ability to maintain and enhance your lifestyle.  We have developed and refined a proprietary process for doing this called Personal Vision Planning ™  .  This is what we utilize with our clients to help simplify their lives while protecting and enhancing their lifestyles.

So where do we go from here?  Ultimately who wins the Whitehouse may matter less than the overall political landscape of the House and Senate once the dust settles.  Broad markets can handle bad news and also good news but become very volatile when there is uncertainty.  Until we have more clarity on the political landscape, and policy direction of whomever prevails, we anticipate continued broad market volatility.  Regardless of the outcome we believe there will be strong growth for the domestic equity markets over the next three to five years.  As interest rates rise long term fixed income investments will under-perform.  Many may miss the opportunity for growth as they focus on negative social issues such as higher inflation and unemployment.   As always we recommend a broadly diversified asset allocation that includes cash and short term fixed investment for any near term needs to so that market and portfolio fluctuations do not impact you or your lifestyle.   If nothing else the election will be good political theatre!

“Have I gone mad?
“I’m afraid so, but let me tell you something, the best people usually are.”
― Lewis Carroll, Alice in Wonderland

Please note that will be hosting Andy Friedman for two exclusive events on September 7th (7 pm) and 8th (8:30 am) at LaMalfa Center in Mentor OH.    According to CNBC, Andy Friedman is “one of the nation’s most sought-after speakers on all things political.”    If you would like to attend there is neither a cost nor any obligation; however due to limited space reservations are required.  Please contact our office (440) 974-0808 or click here to reserve space.

 

 

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of  Randy Carver and not necessarily those of Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance may not be indicative of future results. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary.