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The Northern Star Newsletter 7/25/19 - Stocks Descend from Recent Peaks


Message from Jon

Market Update:

We are at high's in the DOW, the S&P 500, and the NASDAQ. We have a FED that is looking to make a 0.25% rate cut and there's an earnings season underway—things seem to be looking positive so far.1,2 All in all, steady as she goes.

I was reading an article on Ray Dalio's Alpha Fund, one of the world's largest hedge funds, and it was -4.9% 2019 to June, and remember someone telling me early in my career that 100% of money managers underperform their respective benchmark at least once in their tenure.3 Warren Buffett's Berkshire Hathaway has even underperformed the S&P 500 for the last decade, and he is often considered the world's greatest investment manager.4

All this goes to show you that not every year will be a good year for 100% of your investments. Some will do better than others, and to have a properly diverse portfolio is to guarantee the market will neither completely destroy your portfolio-but also that you may never see 100% returns either! The best plan is to strategize what your particular needs are, align to the strategy that can currently obtain those needs, but then also monitor, adjust, and realign your portfolio as characteristics and market conditions shift. This explains why during a cyclical bear market condition, a buy and hold approach is not the best approach to take-just like an active managed approach would not be best during a cyclical bull market condition. Preparing to and making shifts is better than benign neglect. 

Till we speak again, stay cool! 




  1. https://www.bloomberg.com/news/articles/2019-07-21/powell-preference-and-fomc-split-support-quarter-point-july-cut
  2.  https://finance.yahoo.com/calendar/earnings?from=2019-07-21&to=2019-07-27&day=2019-07-22
  3.  https://www.ft.com/content/dad12be2-abbd-11e9-8030-530adfa879c2
  4.  https://www.wsj.com/articles/buffett-defends-berkshire-amid-lagging-performance-11557091272

Stocks Descend from Recent Peaks


The Week on Wall Street
Stock benchmarks retreated during the first week of the second-quarter earnings season. As some big names shared quarterly results, investors seemed more interested in what might happen at the Federal Reserve's upcoming policy meeting.

For the week, the S&P 500 declined 1.23%. The Dow Jones Industrial Average lost 0.65%, and the Nasdaq Composite, 1.18%. International stocks, measured by the week-over-week performance of the MSCI EAFE index, were down 0.79%.[1][2]

Households Bought More Last Month
Retail sales were up 0.4% in June, according to the Department of Commerce. Consumer purchases account for more than two-thirds of America's gross domestic product, and data like this may rebut some assertions that the economy is losing steam.[3]

Traders still expect the Federal Reserve to make a rate cut at the end of this month, even with low unemployment, solid consumer spending, and stocks near record peaks. Ordinarily, the Fed lowers interest rates to try to stimulate business growth and investment when the economy lags. After ten years without a recession, its new challenge is to make appropriate moves to ward off such a slowdown.[4]

Will Wall Street's Expectations Be Met?
Thursday, Federal Reserve Bank of New York President John Williams noted that Fed policymakers could proactively adjust interest rates and take "preventative measures" to ward off a potential slowdown. A New York Fed spokesperson later said that Williams' comments were "academic" and did not concern "potential policy actions." Still, Fed Vice President Richard Clarida made similar comments last week, expressing the view that Fed officials "don't have to wait until things get bad to have a dramatic series of rate cuts."[5]

Two other Fed officials - Esther George and Eric Rosengren - have publicly stated that they are not in favor of a cut.[6]

What's Next
About 25% of S&P 500 companies report earnings this week. In addition, the federal government will present its first snapshot of the economy's second-quarter performance. 

Tuesday: June existing home sales figures appear from the National Association of Realtors.
Wednesday: The Census Bureau presents its June report on new home buying.
Friday: The Bureau of Economic Analysis releases its initial estimate of Q2 economic growth.

Source: Econoday / MarketWatch Calendar, July 19, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

Monday: Celanese (CE), Halliburton (HAL), TD Ameritrade (AMTD)
Tuesday: Coca-Cola (KO), Texas Instruments (TXN), Visa (V)
Wednesday: AT&T (T), Boeing (BA), Facebook (FB), PayPal (PYPL)
Thursday: Alphabet (GOOGL), Amazon (AMZN), Anheuser-Busch (BUD), Intel (INTC), Starbucks (SBUX)
Friday: AbbVie (ABBV), Colgate-Palmolive (CL), McDonalds (MCD)

Source: Zacks, July 19, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.


Quote Of The Week

Fountain Pen

"A vacation is having nothing to do and all day to do it in."

-Robert Orben

Recipe Of The Week

Fork and Knife

One-Pan, Cheesy Potato Casserole

[6 to 8 servings]
  • 1 lb. of uncooked breakfast sausage without casings
  • 1 onion
  • 1 bell pepper
  • 1 tsp. of salt
  • 20 oz. of frozen hash browns
  • 10 eggs
  • 1 cup milk
  • 2 cups of cheddar cheese, shredded
  • A sprinkle of pepper
  • Optional: other toppings such as chives, mushrooms, spinach, etc. 

This recipe is great when you're on vacation and want to make breakfast for the whole family, but have a limited kitchen. In addition, this simple casserole can be baked ahead of time and stored overnight, making it the perfect, go-to breakfast on busy vacation mornings.
  1. Preheat the oven to 375° F. Lightly grease a 9" x 13" baking dish (or whatever you can find in your hotel kitchen!).
  2. Cook the sausage in a large skillet.
  3. Add the toppings, stirring occasionally. Cook until softened, but not overdone.
  4. Transfer the sausage and veggie mix to the baking dish, then add the hash browns and combine. Spread into an even layer.
  5. Whisk the eggs, milk, salt, and pepper, then pour over the veggie and meat layer.
  6. Bake until the top is golden brown, about 45 minutes. 
Recipe adapted from Kitchn[7]


Tax Tips


Short-Term Rentals, Long-Term Income Tax Deductions

If you have a short-term vacation rental, you may be bringing in some extra income this summer season. By following a few easy tips, you can reduce your income taxes and keep more of what you make (some of which might go into a savings account for a vacation of your own!). Here are some helpful tips that short-term rental owners should consider:
  • You don't have to pay income tax on what you earn from your short-term rental, but only if you don't rent it out for more than 14 days throughout the year, and also, if you live in it as your primary residence for at least 14 days out of the year.
  • Keep thorough records as well as separate business and personal expenses. You may be able to deduct all ordinary and necessary expenses to operate the rental home.
  • If you rent out a room in your home rather than the entire property, you may still be able to deduct a portion of the mortgage interest and property taxes of the property. But you still need to delineate between personal and business use of the residence. 
Renting out an extra property or an extra space in your house is a great way to make some extra cash, and the tax laws may work in your favor. 

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

Tip adapted from TurboTax[8]

Golf Tip


How to Pack for the Perfect Golf Vacation

Planning a golf trip this summer? What (and how) you pack will make a big difference in how well your trip goes. While you can't always control the course or the conditions, you can control what you have handy on your trip. Here are some packing tips to consider for that ultimate golf vacation:

  • Make sure you have the perfect travel bag to hold your clubs. Our favorites are Sun Mountain and Club Glove.
  • Be ready for any weather with a waterproof golf bag, waterproof gloves, a rain jacket, and your favorite, moisture-wicking clothing. And don't forget an extra pair of shoes!
  • Have plenty of things to help you recover during your trip, including foam rollers, pressure point balls, and back massagers. Those 36-hole days will wear you out if you don't properly rest and recharge.

A golf vacation is every golf enthusiast's dream, so make sure you're prepared for your adventure with these tips. 


Tip adapted from Golf.com[9]

Healthy Lifestyle

Medical Cross

Rest, Relaxation, and Healthy Nutrition

Between the junk food at airports, room service, and the love of lounging, vacations can be where healthy habits meet their match. But you can make healthy choices while on vacation and still have fun. Here are some tips on how to stay healthy, even on the road:

  • Before heading to the airport, pack your own snack box with fruits, veggies, nuts, lean proteins, and healthy bars. That way, you won't be tempted by the chips and soda while you wait for your flight.
  • Get plenty of sleep. Just like at home, it's really important to get a good night's sleep while traveling. Sleep helps your body reset for the next day and will help you maintain your weight.
  • Hydrate often. Our bodies don't function as well when we're thirsty, so make sure you always bring your reusable water bottle with you on vacation. And no, margaritas on the beach don't count as hydration.
  • Take your vitamins to make sure you feel your best. A daily pill holder can help you remember to take them, even while traveling. 
There's no reason why you have to sacrifice all your hard work and healthy habits while on vacation. If anything, continuing a healthy lifestyle while traveling will help you have even more fun!

Tip adapted from Travel & Leisure[10]

Green Living


Be an Environmentally Friendly Traveler

There are lots of ways to live green on the go. Here are some of our favorite ways to be an environmentally friendly traveler on your next vacation:

  • Use public transport whenever you can in order to reduce carbon emissions. Plus, public transportation is a great way to explore a new city.
  • Travel by land instead of air when possible. One five-hour flight increases your carbon footprint by one ton! Take a train, bus, car, or boat to see more during your trip.
  • If you're staying in a hotel, avoid getting clean towels or sheets every single day. You want to pamper yourself, but by reusing your towels and sheets for a day or two, you will help save water and energy.
  • Avoid bottled water when possible. Bring a reusable water bottle along with you, and use water filters to refill your bottles with safe water. 
Never take a vacation from green living with these easy tips while traveling!

Tip adapted from World Nomads[11]

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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 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 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.

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[1] www.wsj.com/market-data
[2] quotes.wsj.com/index/XX/990300/historical-prices

[3] www.cnbc.com/2019/07/17/the-feds-expected-rate-cut-not-supported-by-economic-data.html

[4] www.cnbc.com/2019/07/17/the-feds-expected-rate-cut-not-supported-by-economic-data.html

[5] www.thestreet.com/markets/stocks-climb-rate-cut-hopes-microsoft-earnings-15025435

[6] www.cnbc.com/2019/07/19/feds-rosengren-not-on-board-for-rate-cut-i-think-we-should-wait.html

[7] www.thekitchn.com/recipe-cheesy-hashbrown-breakfast-casserole-241992

[8] turbotax.intuit.com/tax-tips/rental-property/10-tax-tips-for-airbnb-homeaway-vrbo-vacation-rentals/L8CEWgLSP

[9] www.golf.com/courses-and-travel/2017/04/28/how-pack-golf-trip

[10] www.travelandleisure.com/slideshows/wellness-health-celebrity-tips-vacation?slide=378785#378785

[11] www.worldnomads.com/responsible-travel/make-a-difference/planet/top-10-tips-for-environmentally-friendly-travel

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