The Internet has become a playground for tech savvy hustlers who masquerade as legitimate media sources and provide too-good-to-be-true financial tips to private investors…for a price. Preying on an age-old combination of greed and fear, these so-called financial experts use phrases like “crash alert system” and “secret market calendar” to lure unsuspecting victims of potential fraud. Frankly, we’re appalled, particularly when these scam artists quote the Bible in an attempt to peddle their wares. Consider the offensive irony of someone who quotes Timothy in his promotional material, “The love of money is the root of all evil” and then charges $97 a month for financial newsletter he didn’t write and a thinly disguised advertisement he promotes as an educational video. We’re all for education. We maintain several subscriptions to financial newsletters and generally find them to be informative, useful resources. Nothing irritates us more, though, than the fakers; the shiny pop-up videos edited to look like legitimate media interviews; websites that mimic familiar news sources; scholastic white papers that quote not a single legitimate source. We urge caution across the board when accumulating necessary financial information. Don’t click on links that arrive unsolicited in your email in-box. Read the information in a website’s footer before subscribing to anything within the site. Check the source of information you suspect may be too good to be true. Lastly, look for an advisor with a fiduciary responsibility to his or her clients before you trust your hard-earned money to anyone.
Just last week, the S&P 500 Index pierced the 1900 level for the first time in history. However, some important divergences still exist in the stock market. For example, small-cap stocks, as represented by the Russell 2000 Index, are down approximately 5% year-to-date. In addition, technology stocks, as represented by the PowerShares QQQ ETF, are only up 1% year-to-date and are below their all-time highs. The S&P 500, which represents large-cap stocks, is up over 2.5% year-to-date. Thus, there has been significant variation in stocks returns across many equity benchmarks leaving investors confused by the volatile market action. The heavy selling in technology and small-cap names over the past few months is indeed making some investors nervous. While divergences among market indexes typically can be a cause for concern, we believe the market has just been self-correcting the high valuations in some areas of the market. We are believers in the sustainability of the recent market highs set by the S&P 500. Indeed, since the beginning of the year, we have been pruning many of the higher valuation stocks in our Portfolios and replacing them with large-cap core and large-cap value stocks. We are of the belief that these types of stocks will continue to offer a superior risk/reward tradeoff versus the tech-heavy NASDAQ Index and small-cap stocks. It is all a matter of valuation and fundamental positioning. While the S&P 500 is not cheap, we do not find it expensive either given the backdrop of low interest rates and signs of an accelerating industrial economy. We believe the importance of being in the right stocks is paramount right now. This is not a market that is driving all stocks higher. There are clear fundamental and valuation concerns within some pockets of the stock market. While we would clearly prefer to see more market breadth with all market averages setting all-time highs, we recognize it has become a stock-picker’s market. … | Read More »
It’s Spring; wedding season is upon us! Weddings usually bring happy thoughts of holding hands and romance and new lives. But, that is only a small percentage of what actually goes into being married. The majority of marriage is grunt work, not romance. One of the touchiest parts of being married is money – who earns it, what it means, where it’s kept, when it’s saved and how it’s spent. Money is a subject that will continue throughout your whole marriage. Before you get married, you most definitely want to talk money. It does not get easier to broach once you’re hitched. It is just good common sense to know about your intended’s money language, money comprehension and money fitness. It’s hard to do but if the tough questions can’t or won’t be answered, then you may have a much larger problem on your hands. I have heard people say that feels too awkward or out of bounds or threatening and sometimes even shameful to talk about money. But, it is simply imperative to your marriage’s health to ask each other hard questions and answer honestly. You will need to keep the money dialogue going without ridicule or eye rolling! We all grew up differently and need, expect and want different things from money. So, let’s talk about it. There are so many different aspects of marriage money that we’ve put together a series of questions for the bride and groom to be. We are calling it PECK, as in: Practical, Emotional, Contractual and Kids marriage questions that every couple needs to discuss before marriage. It might even save you from making a disastrous decision. Today we are tackling the P, as in Practical questions, you need to ask each other. We’ll cover the Emotional, Contractual and Kids aspects of the PECK program on consecutive Mondays here on this blog. We begin with the nine most bare bones, practical questions… | Read More »
Finally retiring? Congratulations! Have you thought about where your healthcare coverage is going to come from until you hit that magical age of 65 when you are Medicare eligible? Healthcare, for many, is one of the most important factors in determining when to retire. Make sure to do some homework and work with someone with a fiduciary standard to help you make sense of the sometimes confusing health insurance environment we live in today. If you are already 65, your employer may offer a retiree Medicare insurance benefit. If they do, in many cases it is offered at no cost or reduced cost to you. If your employer doesn’t offer a retiree benefit, there are multiple options available to you in the Medicare world. We can explain each option to you in simple terms so that you can make an educated decision on what option is best for you. If you are under 65, the first thing you should do if you are retiring and currently have group benefits is ask your HR department what the continuation options for health insurance are. Sometimes, as a retiree benefit, your employer will still continue to offer coverage at no cost or a lower cost to you. If your employer doesn’t allow you to continue your current coverage as a retiree benefit, he or she must give you the option of COBRA continuation coverage. This is a mandated benefit and it allows you to keep your current coverage from your employer for 18 months. The main difference from COBRA to retiree benefit health insurance is that with COBRA, you will be responsible for the entire cost of insurance. This in many cases is the simplest and most affordable option available to someone looking to retire. With that being said, it is always in your best interest to do your due diligence and compare with the individual market. The individual market for major medical… | Read More »
What is earnings season? Every quarter, publicly traded companies are required to file a report stating their sales and earnings as well as to provide a general business update. For lack of a better description, it is like a quarterly report card. Typically earnings season starts a few weeks after the completion of the calendar quarter and runs for approximately four weeks. At Winch Financial, the Investment Team is busy sifting through all of the various earnings reports and listening to management conference calls summarizing the business results of the first quarter of 2014 and analyzing the operating direction for the remainder of the year. Earnings season is an important time in the Investment Department. It presents an opportunity to analyze the most recent financial statements of a company and get a key read of operating results and direction. For our stock and bond investments we want to make sure everything is on track with our forecasts. Earnings season also gives the Investment team the opportunity to evaluate trends in corporate America and reposition our holdings, if necessary, to capitalize on emerging trends. It also provides the Investment Team with the data it needs to develop new financial models and assess individual company valuations. Just like a child’s school report card, an earnings report provides insight into a company’s strengths, weaknesses and opportunities. While it is still early in earnings season, our initial read shows companies handled the impacts of a harsh winter effectively. Importantly, corporate America sounds confident a pick-up in economic activity in the developed markets will accelerate as the year progresses. The one worrisome trend is a general slowdown in activity in emerging markets. Overall, companies appear well positioned and confident on future business activity. Winch Financial remains optimistic the bull market for stocks is still intact and we are seeing clear signs of acceleration in economic conditions. Lastly, Winch Financial is expecting interest rates to start… | Read More »