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Northern Star Newsletter 08/14/2017

Northern Star Newsletter 08/14/2017

Message from Jon
Market Update:

It comes as no surprise that we have had some increased moodiness in the markets over these past couple of weeks. Some of it stems from the increased tensions over North Korea and wondering just exactly how our new president will respond and react. The reality is that we have been long overdue for a 4-7% correction, and this recent exchange (although highly unlikely to ever manifest into anything real) might have just been the catalyst for it...MIGHT!

We are seeing some dynamic changes to our technical indicators internally, but nothing that suggests we should be defensive or concerned at this point.


Summit Pathway Update:

The recent audit and discussions with clients have only confirmed our renewed approach to circling back around to the comprehensive roots of our clients' needs. The Summit Pathway (technology, discovery, and deployment process) is being implemented, and so far it has been met with really good feedback from clients whom I have had the opportunity to deploy it with. Last week, we used it to confirm that one of our long-standing clients gets to retire early at the end of 2017! Having the ability to run over 6 different variations and 'what-if' scenarios gave us both confidence to move forward and an exact action plan of what, who, and exactly when we can execute his plan. 

The technology allows us to run 1,000 Monte Carlo simulations centered around needs, wants, and wishes of each client, giving us instant and accurate feedback on their trajectory and approach. It takes a bit to get everything loaded and correctly dialed in, but when it is, it is very impressive. Coupled with our experience with the markets, taxes, legal docs, and the like, we are very excited to bring this new approach to bear for the benefit of our clients.

Till we speak again, enjoy the start of school!




Markets Turn Jittery


Last week, rising tension between North Korea and the U.S. rattled the world's markets. As the two countries traded tough words, concerns escalated and markets reacted emotionally to the news.[1]Though stress is building internationally, we remain committed to focusing on the market fundamentals that drive long-term value.

In the coming days, we will publish a white paper outlining the details of how markets have reacted to other significant geopolitical events. History shows that markets can fall in the wake of alarming news but do recover, given time.[2] We encourage you to stay tuned for the white paper and talk to us if you have questions or concerns. 

Amidst the pressure last week, volatility returned to markets - and all three major U.S. market indexes turned south.[3] The Dow dropped 1.06%, the S&P 500 fell 1.43%, and the NASDAQ declined 1.50%.[4] Global markets also reacted as the MSCI EAFE lost 1.59% for the week.[5]

Though international developments dominated headlines, economic news important to markets and investors continued to roll out. The data reflects a solid economy, but some possible headwinds are on the horizon. Here are the highlights:

  • Impressive Corporate Earnings: Q2 corporate earnings reports both domestically and internationally were impressive. Reported corporate earnings in the U.S. increased an average of over 10% for the second quarter in a row - their first time doing so since 2011.[6]
  • Low Inflation: The consumer price index, which measures changes to the average price of specific goods and services, rose only 0.1% in July.[7]Expectations for a 0.2% increase failed to materialize as housing and travel costs, wireless services, and auto sales all slumped in July.[8] At 1.7%, year-over-year inflation remains below the Federal Reserve's targeted 2% growth rate. Continued low inflation may cause the Fed to rethink its plans to raise interest rates.[9]
  • Rising Demand for Labor: Labor markets continue to be a key economic driver as evidenced by sharply rising job openings. June's job openings jumped to 6.2 million from 5.7 million in May.[10] Year-over-year, job openings climbed an impressive 11.3%.[11] Moreover, jobless claims remain at historic lows.[12]
  • High U.S. Household Debt: The current outstanding consumer debt of $12.7 trillion is now higher than the previous record reached in 2008. This debt load could wind up being a drag on consumer spending and the economy as a whole.[13]

What Is Ahead

Tense geopolitical headlines may continue, but there will be plenty of market news, too. Retail, manufacturing, and housing data will come out this week, and Friday's August consumer sentiment numbers will be of interest.[14]Though the markets may move with emotions, economic fundamentals should continue to be the base for long-term value. 

No matter what questions you may have, we always welcome you to reach out and contact us. We are here to help.



Tuesday: Retail Sales, Import and Export Prices, Housing Market Index, Business Inventories
Wednesday: Housing Starts
Thursday: Jobless Claims,Industrial Production

Friday: 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.


Tips to Keep in Mind for Taxpayers Traveling for Charity*


During the summer, some taxpayers may travel because of their involvement with a qualified charity. These traveling taxpayers may be able to lower their taxes. Here are some tax tips for taxpayers to use when deducting charity-related travel expenses:

Qualified Charities. For a taxpayer to deduct costs, they must volunteer for a qualified charity.

Out-of-Pocket Expenses. A taxpayer may be able to deduct some of their costs including travel. These out-of-pocket expenses must be necessary while the taxpayer is away from home.

Genuine and Substantial Duty. The charity work the taxpayer is involved with must be real and substantial throughout the trip. The taxpayer can't deduct expenses if they only have nominal duties or do not have any duties for significant parts of the trip.

Value of Time or Service. A taxpayer can't deduct the value of their time or services that they give to charity. This includes income lost while the taxpayer serves as an unpaid volunteer for a qualified charity.

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[16]



Unleash Your Inner Lag

Just what is "lag," anyway? Lag comes from proper sequencing on the downswing, not from trying to artificially hold onto the angle. Proper force generation and sequencing comes from the ground up and winds "out" into the club. Try the following drill to see if you can get the feel for the proper downswing sequence. 

1. Set up to the ground, no ball, with a 6 or 7-iron. Bend both arms and place the shaft on the outer part of your right upper arm. You may have to let go slightly with your right hand.

2. Turn your shoulders 90 degrees as if you had made a backswing, but keep the club shaft against your right arm.

3. Make your downswing and see how long you can keep the shaft touching your right arm - at least until your hands get even with your right leg.

Feel the delayed release and then whipping of the clubhead through impact. You should feel your forearms and club turn over naturally.

Result: Delaying the club release through proper sequencing will help you maximize your distance.

Tip courtesy of Stan Moore | Golf Tips Magazine[17]



Physical Activity for a Healthy Weight

Regular physical activity is important for good health, and it's especially important if you're trying to lose weight or to maintain a healthy weight, which can reduce high blood pressure, reduce risk for type 2 diabetes, heart attack, stroke, and several forms of cancer. It also can reduce risk for osteoporosis and falls, as well as reduce symptoms of depression and anxiety. 

Always consult your own physician before starting any exercise regimen, but the Centers for Disease Control says that strong scientific evidence shows physical activity can help you maintain your weight over time. However, the exact amount of physical activity needed to do this is not clear since it varies greatly from person to person. Talk with your doctor about what is right for you.

Find more information on the CDC website.

Tip courtesy of CDC[18]



Benefits of Reducing Wasted Food 

We may not realize how much food we throw away every day - from spoiled produce and expired meat to uneaten leftovers. In 2014, we threw out 38 million tons of food waste. About 95% of the food we throw away winds up in landfills or combustion facilities. Managing food sustainability and reducing waste can help businesses and consumers save money, as well as provide for those who do not have enough to eat, and conserve resources for future generations. Here are other ways reducing wasted food contributes to greener living:

  • Saves money from buying less food.
  • Reduces methane emissions from landfills and lowers our carbon footprint.
  • Conserves energy and resources, preventing pollution involved in the growing, manufacturing, transporting, and selling of food.
  • Supports your community by providing donated, untouched food that would have otherwise gone to waste to those who might not have a steady food supply.

For more tips on reducing food waste, visit the EPA website.

Tip courtesy of U.S. Environmental Protection Agency[19]



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.


[1] https://www.cnbc.com/2017/08/11/stocks-rise-for-the-first-time-4-days-after-tame-inflation-data.html

[2] https://www.cnbc.com/2017/08/09/as-north-korean-tensions-simmer-heres-how-stocks-reacted-to-past-crises.html?source=newsletter%7Ceveningbrief

[3] https://www.cnbc.com/2017/08/11/stocks-rise-for-the-first-time-4-days-after-tame-inflation-data.html

[4] http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI®ion=usa&culture=en-US 



[5]  https://www.msci.com/end-of-day-data-search

[6] https://www.cnbc.com/2017/08/11/stocks-rise-for-the-first-time-4-days-after-tame-inflation-data.html

[7] http://wsj-us.econoday.com/byshoweventfull.asp?fid=477397&cust=wsj-us&wiconly=1&lid=0#top

[8] http://wsj-us.econoday.com/byshoweventfull.asp?fid=477397&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top

[9] https://www.cnbc.com/2017/08/11/markets-to-fed-theres-little-chance-of-another-rate-hike-this-year.html

[10] http://wsj-us.econoday.com/byshoweventfull.asp?fid=478572&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top

[11] http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482600&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top

[12] http://wsj-us.econoday.com/byshoweventfull.asp?fid=477458&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top

[13] https://www.bloomberg.com/news/articles/2017-08-10/in-debt-we-trust-for-u-s-consumers-with-12-7-trillion-burden

[14] http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482600&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top

[15] http://thepioneerwoman.com/cooking/cheddar-chive-drop-biscuits/

[16] https://www.irs.gov/uac/newsroom/tips-to-keep-in-mind-for-taxpayers-traveling-for-charity

[17]  https://www.golftipsmag.com/instruction/iron-play/unleash-inner-lag/

[18] https://www.cdc.gov/healthyweight/physical_activity/index.html

[19] https://www.epa.gov/recycle/reducing-wasted-food-home#ways

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