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Global Asset Allocation Views – Q2 2018

Posted by on Apr 10, 2018 in blog | Comments Off on Global Asset Allocation Views – Q2 2018

Global Asset Allocation Views – Q2 2018

It really did not take long for volatility to show up in 2018.  After a first couple of weeks of parabolic moves in the equity markets, inflation and a fast pace of rate rises began to scare investors.  These moves, along with the ongoing tit-for-tat tariff battle between the United States and China, has led to the first market correction (a move of 10% or more from the peak) since February 2016 when markets were fearful of a tightening China and slumping oil prices.  Even with this pullback the S&P 500 ended the quarter down only 1.22%.  Fixed income markets were hit the hardest as the yield curve flattened and rates rose at an aggressive pace fueled by inflation fears.  Alternatives and international equities held up the best in the quarter, while large cap growth and emerging market equities even finishing the quarter positive.

So what should we expect going forward?  I currently take the view of being optimistic in the long-term (12-18 months) due in part to global synchronized growth and the ongoing benefits from the Tax Cuts and Jobs Act.  However, in the short-term I am taking a realistic approach as we maneuver tweets that move the market and a potential trade war with China or with Mexico/Canada over NAFTA. (more…)

5 Mistakes to Avoid in Creating Your Retirement Goals

Posted by on Mar 28, 2018 in blog | Comments Off on 5 Mistakes to Avoid in Creating Your Retirement Goals

5 Mistakes to Avoid in Creating Your Retirement Goals

Now is a great time to review your retirement goals and determine how well you are doing at accomplishing the goal you set for when to retire and what lifestyle you will live in retirement. If you are like many people, you might not have a clear idea if you are on track to achieve your goal. In fact, many people have not yet set a specific goal for their retirement. Instead, they tell themselves something like, “hopefully I can retire when I am 65, but who really knows.”  Many people avoid setting goals for retirement because it seems too hard or a little scary to think about.

The fact is if you want to have a dignified, comfortable retirement then you need to understand where you currently stand and what you need to do to live the life you want after the retirement party ends.  It doesn’t need to be an intimidating process and, in fact can be very rewarding. Setting a specific retirement goal gives you a clear target to aim for. You are much more likely to hit a target if you have one to aim for. (more…)

Alternative Facts

Posted by on Mar 6, 2018 in blog | Comments Off on Alternative Facts

Alternative Facts

For many investors, there are two main asset classes that are considered for portfolio construction: Equity and Fixed Income.  Equities tend to be more volatile and provide the capital appreciation investors require to compensate for risk and to reach their investment goals.  Fixed Income provides income in retirement, stability during drawdowns, and has historically been viewed as a portfolio diversifier.  What if I said there was a third asset class that can decrease the risk of a portfolio and potentially increase returns?  This asset class has been known as Alternatives and has been gaining in popularity for their ability to increase the risk-adjusted return of a portfolio. (more…)

New Year…New Tax Changes

Posted by on Jan 23, 2018 in blog | Comments Off on New Year…New Tax Changes

New Year…New Tax Changes

New Year, new Washington is what 2018 is shaping up to look like. The 2017 year was an important one in Washington that promises to carry forward changes to each and every American tax payer in 2018 and beyond. One of the most notable changes of the year was the passage of a new tax law. The tax law’s most notable change included a reduction of income tax brackets. It is important to know smaller changes in the tax law that impact those filing their taxes single, married filing jointly, married filing single, and head of household. These categorize the primary filings of American tax payers: (more…)

Global Asset Allocation Views – Q1 2018

Posted by on Jan 12, 2018 in blog | Comments Off on Global Asset Allocation Views – Q1 2018

Global Asset Allocation Views – Q1 2018

Last year turned out a lot quieter than many pundits had expected going into the year.  The markets brushed off any potential geopolitical turmoil surrounding North Korea, Brexit, and trade wars with China.  There were only eight days when the market was up or down more than 1% and there were zero times where the market was down 3% from top to bottom!  The last time there were no drops of 3% in a year was 1995.  We are currently in the midst of a secular bull market similar to the one in the 90s and very similar to the year 1995.  Back then the market rallied another 155% before topping out four years later in March of 2000 during the tech bubble and ensuing crash.  I still believe we have some room to run and that we are currently in the earnings growth phase of this bull market.  We view any pullbacks as an opportunity to add to equities.

Key Positives:

  • Many valuation metrics are still within 1 standard deviation of their historical average
  • European and Emerging Market earnings, after bottoming out in early 2016, continue to shine heading into 2018
  • The recent corporate tax cuts into a low-rate environment continue to support equities.


Managing Risk and not Returns

Posted by on Jan 5, 2018 in blog | Comments Off on Managing Risk and not Returns

Managing Risk and not Returns

As global equity markets continue to hit all-time highs, clients, family, and friends tend to ask the question: How is the market doing?  This previous question only touches on the return factor in investment management as individuals tend to be more focused on quantifying how much they are up or down.  As the father of value investing, Benjamin Graham, once wrote, “The essence of investment management is the management of risks, not the management of returns.”  Risk tends to be harder to quantify and thus seldom talked about by financial professionals.

Quantitative Measures

There are two quantitative measures that HFS Wealth Advisors utilizes, the Sharpe ratio and Max Drawdown, which can help investors understand risk in their portfolio. (more…)

Winter Winds with no HealthCare Breeze….Are you ready for it?

Posted by on Dec 7, 2017 in blog | Comments Off on Winter Winds with no HealthCare Breeze….Are you ready for it?

Winter Winds with no HealthCare Breeze…Are you Ready for it?

Every winter, consumers using the Affordable Health Care Exchange are asked to choose their healthcare benefits for the following calendar year.  November 1 began the 6 week open enrollment window that ends December 15. The health care exchange is designed to provide health care to Americans who are not covered by an employer provided health care plan. The health care exchange covers a portion of the bill, and the recipient of the health care receives a bill for the remainder, much the same as a traditional employer provided plan.

One of the goals of the Affordable Care Act is to provide preventative healthcare. Studies show that regular routine checkups can prevent major health issues throughout life. In this way, having health care can save money! (more…)

Global Asset Allocation Views – 4Q 2017

Posted by on Nov 6, 2017 in blog | Comments Off on Global Asset Allocation Views – 4Q 2017

The October 7th-13th cover of The Economist led with the phrases “The bull market in everything” and “Are asset prices too high?” The main article mentioned potential bubbles in equities (at an all-time high), fixed income (boosted by easy monetary policy), real estate (see the 2007 Financial Crisis), and cryptocurrencies (Bitcoin, Etherium, etc.).  I will focus my attention on equities since they tend to be the most important, and largest, component of a client’s long-term growth.

What I would like to share today are some of the counter-arguments I have come across in my research regarding high equity valuations.  I will then finish up with investment themes, risks, and how we are currently positioning client accounts. (more…)

The Goldilocks Economy and Bear Markets

Posted by on Sep 22, 2017 in blog | Comments Off on The Goldilocks Economy and Bear Markets

Sorry for the pun (hopefully you have heard of The Story of Goldilocks and the Three Bears), but as we get near year-end it seemed opportune to discuss the current market sentiment and our future outlook.

The U.S. economy is currently in a sweet spot, or a Goldilocks effect, of not being too hot to spur rapid inflation but not too cold to cause a recession.  A bear market, loosely defined as a drop of over 20%, and a recession, two consecutive quarters of negative GDP growth, seem a long way off.

There are a few factors that warrant monitoring: (more…)

College Planning 101

Posted by on Oct 5, 2016 in blog | Comments Off on College Planning 101

The dreaded Free Application for Federal Student Aid will be available October 1st of this year and should be easier to complete because you can use 2015 tax returns and not have to do any updates in the spring after filing your 2016 returns.  The following link summarizes the changes and gives some tips on obtaining the most aid possible.

http://money.cnn.com/2016/09/25/pf/college/fafsa-application-changes/    (more…)