Summit Financial Group Newsletter

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Northern Star Newsletter 10/11/2017

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Northern Star Newsletter 10/11/2017

Message from Jon


Market Update:
 
The trend of this market just seems to be heading higher and higher. Lowry indicated this as of Friday, although in the short-term we can (and probably should) expect a pullback. Over the long-term horizon, the merits of this bull market condition continue to remain intact and favorable.
 
We continue to see the equities side of the equation pulling the bulk of the workload upward with the number one asset class remaining Domestic Equities, but closing the gap and coming in a closer second is International Equities. At this point, we remain fully invested, and our bets on foreign investments continue to pay off for our clients.
 
Shifting gears-I learned something new!
 
While I was at the Risk Management Conference this past week, I gained some new intriguing information. You like to hope that over the course of 2 days, one would make a few good contacts and glean a bit of interesting information.
 
While attending a session from Dr. Daniel Crosby in Behavioral Risk Economics, I learned there was a study done indicating that clients increased their wealth 237% due to relationships with advisors vs. those who go it alone. Apparently, it has less to do with picking the right investments and significantly more to do with making sure clients avoid doing the wrong things with their money at the wrong times (selling during a panic, buying when the risk is high, acting when they should not, etc.).
 
Also, in the same session, an investment strategy that is rules-based outperformed human-based money management 94% of the time. In laymen's terminology, investment based on rules and logic outperforms investments based on human "intuition and gut feel" 94% of the time. I guess it comes back to removing the emotion out of investing and acting in a fashion that is often counter-intuitive.
 
It is always nice to learn something new, but even more so in the process to confirm what it is that you are currently doing as being the correct approach!
 
Till we speak again, make it a productive week!
 
Jon
 
sources: Lowryondemand, Dorsey/Wright, fearlessinvestingconference/dr Daniel Crosby: 4 horseman of the dumbpocalypse; avoiding the 4 most common traps of financial psychology

Third Quarter Review

WEEKLY UPDATE - OCTOBER 9, 2017

This Monday, October 9, marks the 10-year anniversary of the S&P 500's highest point before the Great Recession. While the ensuing decade has provided quite a rocky road for the markets at times, the recovery is undeniable.[1]

In fact, last week, markets posted one record high after another - and the S&P 500 had its longest streak of record closes since 1997.[2] At the markets' close, the S&P 500 added 1.19%, the Dow gained 1.65%, and the NASDAQ grew by 1.45%.[3] International stocks in the MSCI EAFE lost 0.07%.[4]

These domestic gains came despite stocks stumbling slightly on Friday in reaction to disappointing jobs numbers. After 7 years of monthly growth, the September jobs report indicated the first labor market contraction since 2010, with 33,000 jobs lost. The decrease was largely due to the aftermath of Hurricanes Harvey and Irma. Despite this unexpected contraction, however, the unemployment rate fell to its lowest level in 16 years, and average hourly earnings increased by 2.9%.[5]

We also began the first trading week of the 4th quarter last Monday, so we will review Q3's performance and what lies ahead for Q4.

How did the markets perform in Q3?

If we had to pick one word to describe performance in Q3, it would be: positive.

1. Sustained Market Growth
Throughout the quarter, all four indexes we track in this weekly update had solid showings and hit a number of record highs. The S&P 500 was up 3.96%, the Dow rose 4.94%, the NASDAQ jumped 5.79%, and the MSCI-EAFE gained 4.81%.[6] Both the Dow and S&P 500 marked their 8th straight quarter of gains, and the NASDAQ was not far behind with its 5th positive quarter in a row.[7] The S&P 500 even had its least volatile September in over 47 years.[8]

2. Continued Global Gains
Globally, European and emerging markets posted their 3rd straight quarters of impressive gains.[9] In September, Chinese manufacturing experienced its fastest growth since 2012.[10]

What drove the markets in Q3?

Rather than last quarter's growth rallying around a few sectors, markets advanced broadly in Q3, with 10 of the 11 S&P 500 sectors gaining.[11] This positive performance reflects solid corporate earnings, stronger oil prices, and impressive core capital goods orders - though inflation remained below the Fed's target of 2%.[12]

What is on the horizon for Q4?

By most accounts, betting against a strong 4th quarter seems like a bad idea: The S&P 500 has grown during Q4 in 7 out of the past 8 years.[13] Americans remain generally bullish on the economy and continue to increase their spending as their incomes grow and inflation remains low.[14]

In addition, manufacturing, services, and housing all seem to be supporting economic expansion.[15] This growth is not limited to the United States; globally, 94% of countries are experiencing year-over-year economic growth.[16]

Of course, the coming weeks will give us an even clearer understanding of Q3 performance - and Q4 expectations. If you have questions about how the markets are affecting your portfolio and future, please let us know. We are here to provide the guidance you need and help clarify your investment process.

ECONOMIC CALENDAR
Monday: Banks Closed for Columbus Day Holiday
Wednesday: JOLTS
Thursday: Jobless Claims
Friday: Consumer Price Index, Retail Sales, Consumer Sentiment

Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5- year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.


Tax Reminders for 2016 Late Filers Meeting Deadline

For taxpayers who received an extension to file 2016 taxes, the deadline is fast approaching. To help prep, here are some tax details to know:

1. Deadline: Taxpayers with an extension must file their 2016 taxes by Monday, October 16.


2. Military Extension: Those that are in the military and work in combat zones have more time to file. Generally, they have up to 180 days to file and pay their taxes after leaving the combat zone.

3. Disaster-Areas Extension: Taxpayers either living or working in disaster areas can often take more time to file. You can find additional info on the IRS disaster relief page.

4. Free File: The IRS provides taxpayers with the option to file and pay their tax returns online. You can do so for free, and the filing capabilities differ depending on your income. 
Other details may apply, and you can find more information on the IRS website.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.


Tip courtesy of IRS.gov[18]
Golf Tip
Golfer
Try the Chunk-and-Roll to Improve Height
 
No one likes landing in a sand trap, but a greenside bunker shot makes a bad lie even worse. If you want to recover from this situation, you need to have the skill - and nerve - to hit the ball just right.
 
Healthy Lifestyle
Medical Cross
Understand Prediabetes
 
Prediabetes is a medical condition where you have higher than normal blood sugar levels but haven't yet developed type 2 diabetes. Typically, unless someone with prediabetes makes lifestyle changes, they will end up developing diabetes. The long-term effects on your heart, blood vessels, and kidney could start before you even develop the disease.

Does prediabetes have symptoms? 
People usually show little to no signs of prediabetes. One potential signal that you may be at risk of developing type 2 diabetes are darkened patches of skin around your:
  • Armpits
  • Elbows
  • Knees
  • Knuckles
  • Neck
What risk factors exist for prediabetes?
Similar factors that can lead to diabetes can also increase your chance of developing prediabetes. A few of these include:
  • Overweight: When you have more fatty tissue, in particular around your abdomen, your cells become more resistant to insulin. 
  • Dietary Habits: Specific foods can increase your chance of developing prediabetes when eaten regularly. These include red meat, processed meat, and sugar-rich foods and drinks.
  • Exercise: You are more at risk the less physically active you are. By not exercising regularly, you don't burn up the glucose you'd otherwise use for energy.
 
Tip courtesy of Mayo Clinic[20]
Green Living
Leaf
Go Plastic-Free With These Kitchen Items
 
Choosing to ditch plastic in your home is a great way to support a green lifestyle. With the plethora of household items made from plastic, you can make a real difference with some relatively easy tweaks. A great starting point is to replace plastic kitchen items with eco-friendly alternatives.
  • Plastic containers: Instead of storing food in plastic containers, like Tupperware, use glass jars or metal containers instead.
  • Plastic sandwich and snack bags: You can swap plastic bags in your lunch with glass or metal containers.
  • Dishwashing detergent in plastic bottles: You can buy powdered detergent that comes in a cardboard container, and then recycle the box once you're done with the product.
  • Nonstick pans: The ingredient that makes those pans nonstick is actually plastic, which you can avoid by using cast iron skillets or stainless steel pans.
 
Tip courtesy of Care2.com[21]
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
 
Diversification does not guarantee profit nor is it guaranteed to protect assets.
 
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

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 Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
 
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies. 
 
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia. 
 
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
 
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.
 
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.
 
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
 
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.
 
By clicking on these links, you will leave our server, as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site. 




   









 
 

 
 







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Our systems are designed for early warning and protection from severe storms that would harm your economic condition

In 2007, our systems indicated we leave the markets while others did not and therefore our clients
 did NOT participate in the downturn of 2008-2009

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