Schwartz
Financial Weekly Commentary
September
28, 2015
The Markets
Oh, the
uncertainty!
Investors are
keeping one eye on the Federal Reserve and the other on politicians trying to
determine what may happen during the last quarter of the year.
The Fed, which is the
central bank of the United States, is responsible for conducting monetary
policy with an eye toward full employment and stable prices. If, as St. Louis
Fed President James Bullard told Reuters,
the economy is near full employment and inflation is sure to rise, then why
didn’t the Fed raise rates in September?
Reuters reported voting members of the Federal
Open Market Committee (FOMC) decided uncertainty in global markets had the
potential to negatively affect domestic economic strength. Mr. Bullard believes
the decision puts an October increase in doubt, too, according to Nasdaq.com. Mr. Bullard told reporters:
“For the committee,
it's always hard to have made a big decision at one meeting and come back at
the next meeting. The key question will be what kind of data did you get during
the intervening period that changed your mind, and it's not that clear what
data we will have in hand in October that we would be able to cite to support
my position, relative to what we had at the September meeting. But it is
possible.”
Regardless,
Chairwoman Janet Yellen made it clear last week she expects to see a rate hike
before year-end. That might have helped settle markets, except Speaker of the
House John Boehner resigned soon after Yellen spoke. The Speaker’s resignation
made a government shutdown this week less likely, according to Barron’s. However, fiscal policy issues
haven’t been resolved. A meeting of the political minds this week would set the
stage for a mid-December showdown and that’s data the Fed will have to consider
if the December FOMC meeting occurs amidst a government shutdown and
debt-ceiling crisis.
No one seemed to be
happy with the state of affairs this week, and stock markets were awash in red
ink.
Data as
of 9/25/15
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
Standard & Poor's 500
(Domestic Stocks)
|
-1.4%
|
-6.2%
|
-1.8%
|
10.2%
|
11.1%
|
4.7%
|
Dow Jones Global ex-U.S.
|
-3.4
|
-9.2
|
-13.7
|
0.2
|
-0.1
|
0.9
|
10-year Treasury Note (Yield Only)
|
2.2
|
NA
|
2.5
|
1.7
|
2.5
|
4.3
|
Gold (per ounce)
|
0.5
|
-4.4
|
-5.5
|
-13.5
|
-2.4
|
9.5
|
Bloomberg
Commodity Index
|
0.9
|
-15.2
|
-25.7
|
-15.5
|
-8.7
|
-6.6
|
DJ
Equity All REIT Total Return Index
|
-0.3
|
-4.7
|
8.4
|
9.0
|
11.6
|
6.9
|
S&P 500, Dow
Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested
dividends (gold does not pay a dividend) and the three-, five-, and 10-year
returns are annualized; the DJ Equity All REIT Total Return Index does include
reinvested dividends and the three-, five-, and 10-year returns are annualized;
and the 10-year Treasury Note is simply the yield at the close of the day on
each of the historical time periods.
Sources: Yahoo!
Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance
is no guarantee of future results. Indices are unmanaged and cannot be invested
into directly. N/A means not applicable.
what will they say? Soon, cars will be
able to talk with one another. Vehicle-to-vehicle communication (V2V) has been
tested in Ann Arbor, Michigan, a relatively mild and polite Midwestern town.
Now, V2V is being rolled out in New York City, along with technology that
allows traffic signals to contribute their two cents. Just imagine what a New
York cab might have to say to another New York cab that changes lanes without
signaling.
Okay,
it’s nothing like that.
The
idea is to reduce traffic accidents. If a dangerous situation arises an alert
sounds. Gizmodo.com described it like
this:
“These sensors send out signals over a
specific wireless spectrum band and also receive them from other vehicles,
creating a network of communicating sensors that ping when there’s danger… A
secondary form of the technology, called Vehicle-to-Infrastructure, does the
same thing – but with sensors embedded in stop signs, traffic lights, and other
pieces of road infrastructure.”
Soon,
people will be able to install V2V on smartphones so they can ping a warning to
approaching cars as well.
While
V2V seems like a good idea, pinging a warning to a distracted driver moments
before a crash and expecting them to respond appropriately may be asking too
much. The Economist suggests that
automation – giving vehicles the ability to take over – cannot be far behind. “Depending
on how you look at it, that’s a good thing – or terrifying… opening cars and
buses up to computerized control also means opening them up to hackers… Imagine
the fun they could have if thousands more vehicles could be controlled from
computers or smartphones.”
Ultimately,
intelligent transportation systems are expected to optimize the number of
vehicles that can use roadways, helping save money that would otherwise be
spent on expanding infrastructure to accommodate population growth.
Weekly Focus – Think About It
“Forgiveness is the
fragrance that the violet sheds on the heel that has crushed it.
--Mark Twain,
American writer
Value
vs. Growth Investing (9/25/15)
-1.64
|
-4.59
|
3.36
|
-8.05
|
0.56
|
12.80
|
13.46
|
|
-1.36
|
-4.67
|
3.66
|
-7.63
|
0.24
|
12.24
|
13.30
|
|
-1.67
|
-7.70
|
2.62
|
-8.41
|
-0.31
|
13.56
|
14.15
|
|
-1.93
|
1.41
|
4.42
|
-5.65
|
6.69
|
14.36
|
15.44
|
|
-0.39
|
-7.93
|
3.84
|
-9.01
|
-5.87
|
8.81
|
10.25
|
|
-2.26
|
-3.77
|
2.74
|
-8.43
|
1.61
|
15.03
|
14.16
|
|
-2.39
|
-4.36
|
2.37
|
-8.87
|
2.08
|
15.39
|
15.16
|
|
-3.24
|
-1.09
|
2.47
|
-8.60
|
4.32
|
13.84
|
13.56
|
|
-1.08
|
-5.85
|
3.46
|
-7.78
|
-1.64
|
15.95
|
13.72
|
|
-2.82
|
-6.13
|
1.97
|
-11.36
|
0.93
|
12.36
|
12.85
|
|
-2.72
|
-6.15
|
2.46
|
-11.83
|
0.35
|
12.60
|
12.52
|
|
-4.36
|
-1.82
|
1.27
|
-11.01
|
5.04
|
12.81
|
13.69
|
|
-1.26
|
-10.10
|
2.23
|
-11.17
|
-2.33
|
11.67
|
12.33
|
|
-1.90
|
-6.93
|
2.55
|
-8.76
|
0.21
|
13.83
|
14.26
|
|
-2.34
|
0.70
|
3.83
|
-6.58
|
6.11
|
14.15
|
14.99
|
|
-0.59
|
-7.66
|
3.65
|
-8.91
|
-4.79
|
10.44
|
11.09
|
©2004 Morningstar, Inc. All Rights Reserved.
The information contained herein: (1) is proprietary to Morningstar; (2) is not
warranted to be accurate, complete or timely. Morningstar is not responsible
for any damages or losses arising from any use of this information and has not
granted its consent to be considered or deemed an “expert” under the Securities
Act of 1933. Past performance is no guarantee of future results. Indices are unmanaged and while these indices
can be invested in directly, this is neither a recommendation nor an offer to
purchase. This can only be done by
prospectus and should be on the recommendation of a licensed professional.
Office Happenings
Financial Security 1
In the past, I’ve
occasionally commented on ways to protect your finances from crooks and criminals. Many people have told me how much they
appreciate this information, so I thought it might be a good idea to delve
even deeper into the topic of financial security. After all, protecting what you have is
important no matter who you are.
So for the next few
months, I’m going to devote one article I send to a different aspect of
financial security. This month, let’s
start with the Big One: identity theft.
***
Many things have
changed over the last couple of decades; some things for the better, others for
the worse. Credit and debit cards have
made it easier to pay for your purchases, but they’ve also made it easier for hackers
and con artists to get the information they need to steal your identity. This
is especially true when paying for goods and services over the internet.
The scariest
thing? Most people don’t know they’re a
target until it’s too late.
Fortunately, there
are steps you can take to protect your identity. The first step is to recognize the most
important tools you have to combat identity theft.
Awareness and Knowledge
Identity thieves
target many different types of people, but the older you get, and the closer
you are to retirement, the higher up their list you go. Why?
Because older adults frequently have access to cash they’ve been saving
up for their entire lives. Many older
adults also have great credit that they’ve been building up over a long period
of time. Additionally, some people value
their independence so much they are hesitant to report that their finances or
identity have been compromised, fearing their relatives will think they can’t
handle things on their own.
So how can you
protect yourself and your loved ones?
Here are some other steps you can take:
Ÿ Do not
publish the date of birth and death in obituaries. Dishonest people can use that information to
obtain a death certificate, which usually includes the social security number
for the deceased individual.
Ÿ Don’t make
impulsive decisions based on fear. If
you receive an email or phone call stating that it’s from your bank or the
government, and that you’re in trouble, look into it before providing the
sender with any personal information.
Typically, the government will not contact you by email or phone. They will contact you by mail. Your bank will never ask you to provide
information through email either. If
you’re concerned about the credibility of a call or email from your bank,
contact the nearest branch and ask them.
Ÿ If someone
contacts you saying they’re a relative in trouble and need your help, ask them
something that only your relative would know.
Or ask a trick question that reveals they’re lying, such as “How’s your
dog Scruffy? Did he get better?” when
you know that relative doesn’t have a dog.
If they say “Oh he’s doing much better,” then you know they’re a fraud
and you should immediately hang up.
Ÿ Keep all
personal documents in a safe place.
Don’t carry them around with you, especially not your Social Security
card.
Ÿ Don’t open emails from senders you don’t recognize. These can be disguised as special offers for
things such as “weight loss,” miracle cures for different ailments, or products
at unbelievably low prices. Scammers
keep coming up with new subjects to hook you.
These are just a
few things that can help you avoid becoming a victim of finance or identity
fraud. Also, there are companies that
can help you stay protected and informed.
Here’s a link to a site that lists the top rated companies that can help
to defend your identity: www.top10identitytheftprotection.com.
I hope you found
this information valuable. Feel free to
share it with your loved ones so they may stay informed as well.
Above all, don’t
become a victim! Take a proactive
approach to protect yourself, your family, and your retirement.
Also, a few weeks ago I held an information session for both
clients and non-clients alike on the topic of Identity Theft. During that session I passed out a 16 page
paper on “Identity Theft”, I would be happy to either mail or email a .pdf on
the subject just for the asking. Please
contact my office and we will be happy to forward.
Regards,
,
Michael L. Schwartz, RFC®, CWS®, CFS
P.S. Please feel
free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list,
please reply to this email with their email address and we will ask for their
permission to be added.
Michael
L. Schwartz, RFC, CWS, CFS, a registered principal offering securities and
advisory services through Independent Financial Group, LLC., a registered
broker-dealer and investment advisor.
Member FINRA-SIPC. Schwartz Financial and Independent Financial Group
are unaffiliated entities.
This
information is provided for informational purposes only and is not a
solicitation or recommendation that any particular investor should purchase or
sell any security. The information contained herein is obtained from sources
believed to be reliable but its accuracy or completeness is not
guaranteed. Any opinions expressed
herein are subject to change without notice.
An Index is a composite of securities that provides a performance
benchmark. Returns are presented for
illustrative purposes only and are not intended to project the performance of
any specific investment. Indexes are
unmanaged, do not incur management fees, costs and expenses and cannot be
invested in directly. Past
performance is not a guarantee of
future results.
* The Standard &
Poor's 500 (S&P 500) is an unmanaged group of securities considered to be
representative of the stock market in general.
* The DJ Global ex US
is an unmanaged group of non-U.S. securities designed to reflect the performance
of the global equity securities that have readily available prices.
* The 10-year Treasury
Note represents debt owed by the United States Treasury to the public. Since
the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury
Note as a benchmark for the long-term bond market.
* Gold represents the
London afternoon gold price fix as reported by the London Bullion Market
Association.
* The DJ Commodity
Index is designed to be a highly liquid and diversified benchmark for the
commodity futures market. The Index is composed of futures contracts on 19
physical commodities and was launched on July 14, 1998.
* The DJ Equity All
REIT TR Index measures the total return performance of the equity subcategory
of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the
source for any reference to the performance of an index between two specific
periods.
* Opinions expressed
are subject to change without notice and are not intended as investment advice
or to predict future performance.
* Past performance does
not guarantee future results.
* You cannot invest
directly in an index.
* Consult your
financial professional before making any investment decision.
* To unsubscribe from
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