The NBA, The Markets…And Plenty of PB&J!

April 27, 2017 | posted in: Blog, Financial Insights | by

As I began to write this blog post on the outlook for financial markets, I received a fun article from ESPN highlighting a surprising NBA-wide team tradition of featuring a variety of yummy peanut butter and jelly sandwiches for their player pre-game and post-game buffets. Who knew? There is actually a competition between teams regarding the creativity and quality of their PB&J offerings. For example, the world champion Cleveland Cavaliers’ scrumptious pre-tip-off PB&J line-up boasts artisanal breads, homemade grape and raspberry jellies, peanut and almond butter, Nutella and bananas.   Read More  »

Super Bowl 51: Rooting for Shorter Skirts & Fatter Ties

February 3, 2017 | posted in: Blog, Financial Insights | by

Miniskirts and the markets Truth be told, I am not really very excited about watching the Super Bowl game between the Falcons and the Patriots. My guess is that many of you out there feel the same way, that is, unless you grew up in Boston or Atlanta. And it’s not because I’m not a football fan, as I do appreciate the sport. It’s just that the match-up of the titans of the Northeast against the upstarts from the deep South doesn’t exactly get me fired up. But, of course, I will watch, and at the end of a very long couch potato session on Sunday, spent eating too many snacks and watching some football among too many commercials with big guys drinking beer and cooing over huge trucks, I hope, for all our sakes, that the Falcons win.   Read More  »

Next stop…DOW 36,000?

January 27, 2017 | posted in: Blog, Financial Insights | by

With the Dow conquering 20,000 on Wednesday, there is a bit of euphoria out there on “The Street,” along with a healthy dose of skepticism. I’m now fielding questions such as “Is this the start of a new upward leg of the stock market?” or alternatively, “Should I sell my stocks now because they are so pricey?” And, of course there are the general types of questions along the lines of, “What does Dow 20,000 mean?” or “What effect does Dow 20,000 have on my portfolio?” The answer to these questions requires some perspective and experience, and since I’ve been in the investment world since 1975, I believe I maintain a good inventory of both. Let’s travel back to 1999 together for a moment, and let me set the scene. The Dow has risen by close to 18% per year for the prior 20 years* and optimism reigns supreme. I am at an investment seminar in Boston and the huge concern on the minds of the participants and the speakers is the “Y2K problem,” (remember that?), which addressed how computers would handle the century’s turn. Massive spending increases on the parts of corporate IT departments attempting to ward off the potential Y2K disaster are adding fuel to a seemingly unstoppable tech stock rally. During this seminar, I am presented with a signed copy of a book by Glassman and Hassett called “DOW 36000: The New Strategy for Profiting from the Coming Rise in the Stock Markets.” At the time of the book’s publishing in early 1999, the Dow is trading close to 10,000. Many professionals embrace the book’s thesis that a “new paradigm” for evaluating stocks is taking hold – one not as concerned with underlying fundamentals such as price/earnings ratios…Accordingly, stocks are deemed to be underpriced and ready to soar to unfathomable heights. So goes the thinking. Sadly, the book’s publishing was followed by the worst decade in stock market history, which included a tech crash, and later, a devastating full market collapse. After reaching a high of close to 14,000 in October 2007, the Dow dropped to 6,500 during 2009. Glassman and Hassett, the former Wall Street darlings, were eviscerated by the press and in academic circles. As a reminder of what occurred, I always keep my signed copy of the book close at hand to show to clients and colleagues. It invariably draws out a few laughs and stimulates lively discussion. So what does 20,000 mean? On the surface, it doesn’t mean a whole lot. After all, 20,000 is just a weighted measurement of the prices of 30 stocks which comprise the Dow Jones Industrial Average index. But to me, after I dive beyond the surface and reflect on what has occurred in the markets over my career, it actually has much greater significance.. Dow 20,000 means and affirms to me that stock prices DO rise in the long run, and if one holds on to their quality stocks through bad times and good, they will always make money. The ride may be rough, and at times appear to be bleak and hopeless; look no further than the state of economic affairs in 2008-9, during the mortgage and real estate collapse, when the Dow fell to 6,500. But, do the math: a new $1000 investment in the Dow in 2009 would be worth over $3000 today. Good investing takes patience and a long view. At the same time, 20,000 also indicates that it may be time to proceed with caution. It means we must not forget that when markets are frothy, investors can get too optimistic and not see the danger lurking around the bend. Euphoric investors can drive stock prices to unsustainable levels, resulting in inevitable large market corrections. And, as we experienced in recent years, depending on the magnitude of the correction, it may take years for the market to recover. So, Glassman and Hassett were appropriately discredited, but in fact, in one aspect they were right. I am certain the Dow will, indeed, reach 36,000 one day. But when will it happen? That I can’t tell you, and the Dow may very well fall back to 15,000 again before reaching 36,000. But I do believe 36,000 is inevitable, in the same way that rocky markets and large market corrections are. It is the nature of financial markets. Understanding the bumps and turns, and keeping a lid on the euphoria, will serve you well and ensure that you capture the returns that the markets will inevitably bring you. Do I hear Dow 50,000?   *Dow Jones 12/31/79-12/31/99, via AmericanFunds.com/advisor/tools/planning/hypotheticals/update-review/htm   DISCLOSURES: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. This is a hypothetical example and is not representative of any specific investment. Your results may vary. Stock investing involves risk including loss of principal.

How people get as much as 88% more from Social Security!

December 30, 2016 | posted in: Blog, Financial Insights | by

Many people may be unaware of the impact various decisions can have on their ultimate social security benefit amount. Timing of election, work income, taxes, spousal benefits, etc., must all be considered in effective social security benefit planning. Regarding the timing of elections, for example, according to a recent study covered by CNBC, someone who retires and begins claiming Social Security at age 70 would receive a benefit that’s 76 percent higher than the one he or she would receive at age 62. The CNBC piece points out that if you factor in late-career earnings replacing a zero-income year, the increase can become as much as 88 percent for women and 82 percent for men. For the full CNBC piece click how to get 88% more from social security.

Time for a replay!

December 9, 2016 | posted in: Blog, Financial Insights, In The News | by

Austin Frye’s take on football & investing in gets picked up by Investopedia.com! It’s football season, people, and that translates to millions of eyeballs fixated on the gridiron. “After watching football over so many years, I have actually found there are many important commonalities between achieving success on the field and working towards achieving success with financial goals. Here are eight key investment and financial lessons I’ve learned from watching football that you can use to work towards financial independence: 8 strategies for success that football shares with Investing!

Special Market Commentary: Presidential Election 2016

November 4, 2016 | posted in: Blog, Financial Insights | by

2016 Election Playbook Our clients are a very diverse group of people representing the melting pot of cultures that make life in South Florida so rewarding and enjoyable for me. Yes, that means different religions, colors, sexual orientations and income levels. As one would expect, when I take your phone calls, read your emails and participate in face to face meetings, I hear many differing views regarding the presidential election and who is the appropriate candidate to lead this nation forward. As an example, yesterday, after completing a call with a Trump supporter who was literally yelling on the phone about how America needs to “drain the swamp”, I immediately took another call from a frantic, crying Clinton supporter who just could not understand how the recent polls were showing a narrowing gap between the 2 candidates.   Read More  »