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Broker Check

December 13, 2016

GPS Wealth Management Update

We are excited for our new brand and what we have been working on. To reiterate, we wanted to have a brand that resembles the global playing field all investors are playing on.  Nothing changes for our current clients other than enhanced research and planning tools and an updated website.  Our core principles remain consistent; do what’s right for our clients, prospects and employees.

We want to ensure all of our clients are on pace to achieve their goals.  We devise financial plans, investment strategies, tax and estate planning as well as small business owner planning to do just that.  That said, with our recent enhancements and future plans to escalate all of these areas of wealth management we want to remind our clients of our capabilities.  Our founder, Jim Goodland has been a wealth manager for over 23 years and has established a facility in our Plymouth, MN location that houses over 25 professional partners that we work with on a regular basis: An in house accounting firm where many of our clients choose to use for filing their taxes.  Our relationship with the Caylor group goes well beyond filing tax forms.  We strategically meet to keep the integrity of our client’s tax plan that has continuity with their financial plan.  Whether that be tax-harvesting of investments (which we are in process for 2016) to finding other ideas to ensure our clients are taking advantage of the tax-code as it is and evolves.  From section 179 of the tax-code allowing business owners to get a large deduction of purchasing the proper vehicle, tax deductible investments such as oil and gas partnerships, section 1031 and 1035 for tax-free exchanges of real estate and insurance products and much more.  We can help our clients coordinate an estate plan with our in-house attorneys.  Our relationship with Spire Investment Partners gives us a back office of over 55 employees, 60 financial advisors and over $2.4 billion of combine’s assets under management.  Our custodian of choice, Fidelity Investments is the largest custodian in the world and our dedicated team there provides even more back-office support.  Our partnership with Envestnet gives us state-of-the-art technology as well as hundreds of top money manager selections, portfolio construction tools, unified account management and more.  It is indeed exciting times here ate GPS.  Happy Holidays to all!

 

The Markets

 

Dad: “Fra-gee-lay” …it must be Italian!

Mom: I think that says “fragile,” honey.

Dad: Oh, yeah.

 

This holiday season, investors’ enthusiasm for U.S. stocks has rivaled old man Parker’s passion for his major-award leg lamp in ‘A Christmas Story.’ Last week, three major U.S. indices hit all-time highs.

 

Barron’s reported consumer confidence is helping make this the most wonderful time of the year for U.S. stock markets. The University of Michigan’s Index of Consumer Sentiment rose to 98 in December, reflecting a surge in consumer confidence. It was the highest reading since January 2015 and is closing in on the highest level since 2004. Surveys of Consumers chief economist, Richard Curtin, wrote:

 

“The most important implication of the increase in optimism is that it has raised expectations for the performance of the economy. President-elect Trump must provide early evidence of positive economic growth as well as act to keep positive consumer expectations aligned with performance. Either too slow growth or too high expectations represent barriers to maintaining high levels of consumer confidence.”

 

In his December Investment Outlook, Bill Gross cautioned while many aspects of Trump's agenda – tax cuts, deregulation, fiscal stimulus – are good for stocks over the near term, investors should keep an eye on the longer term, as protectionist policies could restrict trade and, together with a strong dollar, could hurt corporate profits.

 

European stocks also moved higher last week after the European Central Bank (ECB) announced a taper. Quantitative easing will continue through 2017, but ECB purchases will fall each month beginning in April.

 

GPS INVESTMENT STRATEGIES remain consistent with the “Trump Trade”.  By adding infrastructure investments, small cap stocks, financial stocks and rebalancing bond positions to more inflation friendly bonds is “so far so good.”  We did this mainly in retirement accounts as the tax benefits from more active trading are more appropriate in tax-deferred (retirement) accounts.

It may not be obvious though diversification has not been what we would want it to be as bonds, emerging markets, international investments, gold amongst most other categories have taken it on the chin.  While we were underweighted to these categories or avoided them completely we have not been immune to the high volatility in asset classes outside of US stocks.  As fiduciaries, we need to have diversification in our portfolios.  After the Presidential election the bond market saw one of its largest spikes in interest rates in history – thus hurting traditional bond funds.  Fortunately, we did trim traditional bond funds in lieu of other asset classes.  Our main bond fund, the Pimco Income Fund remains resilient and continues to provide well above benchmark returns according to Morningstar.  With stock valuations high, interest rates’ raising it is easy to diagnose what has happened – we are more concerned with what WILL HAPPEN.  With no crystal ball we are focusing on achieving our client’s goals by prudent portfolio management combined with our wealth management capabilities.  In our aggressive portfolios we have some traction which is doing well.  In our retirement portfolios we are focusing on our client’s goals, income production and peace-of-mind.  Our moderate and growth portfolios consist of the “Trump Trade” mentioned before.  We will continue to actively monitor all client portfolios, review research reports daily and take action as needed.

 

divorced? you may want to investigate spousal benefits. If you weren’t the top wage earner in your marriage, or your job was raising the children, then Social Security’s spousal benefit could prove advantageous. It provides the lower-earning spouse with 50 percent of the higher-earning spouse’s benefit at full retirement age, even if you’re no longer married. AARP.org explained:

 

“Social Security operates with a philosophy that a divorced person may deserve a personal benefit, having been the long-term partner and helpmate of a member of the workforce. The benefit is similar, in fact, to the spousal benefit that is available to a person who is still married.”

 

To qualify, you do have to answer ‘yes’ to a significant list of requirements:

 

  • You were married for at least 10 years
  • You are unmarried now
  • You are age 62 or older
  • Your ex-spouse is entitled to Social Security benefits
  • The benefit you qualify to receive, based on your work, is less than the benefit your ex-spouse qualifies to receive

 

There are other factors that could affect your application for spousal benefits, including whether your ex-spouse has begun taking benefits. If you would like to learn more, contact your financial professional or visit www.ssa.gov.

 

Weekly Focus – Think About It

 

“My mission in life is not merely to survive, but to thrive; and to do so with some passion, some compassion, some humor, and some style.”

--Maya Angelou, American poet

 

Best regards,

 

The Jim Goodland Team at GPS Wealth Management, LLC

 

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

 

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* All indices referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in 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.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

 

Sources:

http://quotegeek.com/quotes-from-movies/a-christmas-story/651/

http://www.barrons.com/articles/all-together-now-s-p-dow-nasdaq-set-records-1481354718?mod=BOL_hp_we_columns (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/12-12-16_Barrons-All_Together_Now-S%26P_Dow_Nasdaq_Set_Records-Footnote_2.pdf)

http://www.sca.isr.umich.edu

https://www.janus.com/insights/bill-gross-investment-outlook

http://www.marketwatch.com/story/european-stocks-edge-higher-as-ecb-decision-looms-2016-12-08

https://www.ssa.gov/planners/retire/divspouse.html

http://www.aarp.org/work/social-security/info-2016/divorced-social-security-benefits.html

https://www.brainyquote.com/quotes/quotes/m/mayaangelo634520.html?src=t_compassion

 

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Spire Wealth Management, LLC), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Spire Wealth Management, LLC.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Spire Wealth Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the website content should be construed as legal or accounting advice.  A copy of the Spire Wealth Management, LLC’s current written disclosure statement discussing our advisory services and fees is available upon request.