A Tale of Two Investors

It was the best of times; it was the worst of times.

No, I’m not referring to the classic Charles Dickens novel, A Tale of Two Cities.  I am speaking of the volatile nature of the investment markets over the past two quarters and its impact on the Tale of Two Investors.  Last quarter we spoke to the huge decline in Q4 2018 and today I report that the market has not only recovered its previous losses, but S&P 500 is at an all-time high.  These kinds of markets expose “a tale of two investors”; those who have developed a long-term investment plan and know where they are headed and those who haven’t.

December 2018 will go down as the worst year since the financial crisis and the worst December for the S&P 500 Stock Index since 1931.  Yet, Q1 2019 will go down as the best first quarter since 1998. The total decline from September 20, 2018 thru December 24, 2018 was nearly 20%, which is the technical definition of a stock market correction. Yet on April 30, 2019, the S&P 500 Index hit a new record high. The divergence in returns from quarter to quarter might even suggest that it’s not even the same economy.

Based on the market volatility over the past two quarters, have you found yourself asking the following questions:

·         If I am going to depend on my investments to supplement my income in retirement, how does this kind of market volatility affect my psyche or confidence, especially if I am spending down my investments?

·         Is there a way to measure the amount of volatility I can withstand in my portfolio and still meet my long-term financial goals?

·         Is there a better way to protect myself from this kind of volatility?

Greater market volatility may become the new normal, but it doesn’t make it any easier to accept, especially when you’ve worked many years accumulating a meaningful amount of assets and most of all can’t afford to make any major financial mistakes.

Most people spend their lifetime accumulating assets, but don’t develop a plan on how they will preserve and pay themselves from those assets once they retire.

Most of our clients came to us searching for the following:

1.       When can I retire?

2.       What amount of assets will I need to replace my income (desired lifestyle)?

3.       Where will I generate the cashflow I need in retirement?

4.       How can I measure my probability of success and minimize the impact of volatility?

Success in life, no matter what you do involves planning and that’s the approach we take with our clients. Our clients aspire to control their financial destiny instead of being a slave to it and that means eventually retiring on their own terms.  We want our clients to have success in life, because long term financial security is too important not to plan so you can understand where you’re going. 

Financial or Wealth planning is a dynamic process and not static.  It’s not a document you store in a three-ring binder and only look at it every couple of years.  Our approach to planning is based on real time data and assumptions because we believe there are so many complicating factors that can aid or torpedo your outcome. 

There are two kinds of investors: those who have a plan so they can get beyond the volatile nature of the markets and those who don’t.

 

Which one do you want to be?

Let us help you develop a plan for success so you can not only meet your long-term lifetime financial goals but also not agonize over the volatile nature of the financial markets.

 

 

 

Sources: YCharts; Yahoo Finance

Business Insider: “Stocks book their worst year since the financial crisis and worst December since the Great Depression” 12/31/2018

The Street.com: “Dow Gains on Last Day of Worst December Since the Depression” 12/31/2018

 

 

 

 

 

 

 

A Lesson from the Wizard of Oz

Dorothy only wanted to return to Kansas, but the Great Oz was not going to have any part of granting her only wish. However, Toto was able to discover what wasn’t apparent to Dorothy, The Tin Man, Scare Crow or the Cowardly Lion, and brought to life one of the most iconic lines to ever come out of Hollywood.

“Never Mind the Man Behind the Curtain”

Fast forward to the 4th quarter of 2018 and it’s obvious that the “Great Powerful Oz” or at least in the eyes of investors plays the role of the “Volatile Stock Market” and it’s in no mood to deliver our wish (a steady and growing positive market every year). Instead of answering our wishes, it is creating doubt and confusion because no one wants to see their investments go down, let alone when the backdrop to the US Economy is so strong. Such disruptions can distract us from our goal of growing our asset values over our life time.

The question remains, on whether we as investors can look beyond the fright, terror and loud noise made by a volatile stock market, especially when it’s going down. Or, will we have the nerve to pull back the curtain to understand the whole story.

The whole story doesn’t always include positive returns for the stock market every year. The whole story does include market corrections from time to time. Historically speaking, volatile down corrective stock markets as we experienced in the 4th Quarter of 2018 are generally followed by rising markets.

Since 1960, the Dow Jones Stock Average has experienced 8 declines of 20% or greater for an average down of -35.27%, only to rise on average one year later +34% and two-year cumulative return on average of 50.9%. The Average return for 3-month T-Bills (post the above 8 market declines) for the ensuing 1 year and 2 years cumulative is 2.8% and 5.7% respectively. Of course, past performance is not guarantee of future results, and no one knows if or when the market might turn more. **

We all invest our money to reach a long-term goal, whether it’s to beat inflation or accumulate wealth or provide income in retirement. However, as of late, investors have become more focused on annual investment returns because it’s the only measure that seems real in the short term.

If we spend our wealth over our lifetime, then why are we so preoccupied with short-term performance? It’s my theory that we’ve been trained to think this way, because we haven’t had access to the tools that allow us to plan for the future despite the market volatility.

We believe investors should ask themselves two simple questions:

1. What kind of annual average return on my investments do I need to achieve my end goal of either wealth accumulation or retirement income; and have I made the proper assumptions about potential down markets that will surely occur in the future, especially when I can least afford it to happen?

2. Based on your assumed investment return, what kind of distribution rate from your investable assets can you take over your lifetime and still reach your goals?

We want our clients to be able to see the Man Behind the Curtain when planning because long-term financial security is too important not to plan and understand.

Let us help you calculate the returns you’ll need but also the income you’ll require over your lifetime so that you won’t be distracted and stressed by the volatile short-term financial markets.

**Sources: Dow Jones, Wall Street Journal, Yahoo Finance

It Is All About Perspective

“Some people see the glass half full. Others see it half empty.  I see a glass that's twice as big as it needs to be.”

― George Carlin

Given the option of investing in one of the below performance charts over the last 10 years, which represents a better investment return?

Capture1.JPG

Capture2.JPG

The bottom chart represents the cumulative growth of the S&P 500 Index over the last 10 years ended 10/23/2018. The top chart represents the daily investment returns (positive or negative) of the S&P 500 Index over the same time frame.  It’s the same investment but viewed from a different perspective. Obtaining the right conclusion is a matter of perspective. The difference between the two charts could be explained as market noise which can affect short term returns but eventually gets smoothed out over time.

Much has been speculated and written about the potential causes of the recent stock market volatility this year (as measured by among others, the S&P 500 Index price & dividend returns, WSJ posted figures).

·         Rising Interest Rates

·         Inflation fears

·         Strong Economic Growth

·         China and tariff trade wars

·         The bull market run has gone on too long

·         Over valuations

·         Political bickering  

·         More sellers than buyers

 

The one constant in the world, as it applies to investing, is that volatility is here to stay no matter how dire or how good the newsOur focus for our clients is to keep an eye on the long term and not get hung up on short term gyrations in the market, no matter the cause.  We believe near-term volatility is normal market noise and will normalize over time.

In the end, it’s all about perspective.  In our view, tying back to George Carlin’s quote, no matter how large or small, perceived emptiness or fullness, we don’t want to waste a glass by getting distracted by all the short-term market noise. We believe our asset allocation strategy is a sound approach through these volatile periods.

Portfolio Update

The recent volatility has forced us to make some changes in our portfolio mix that we would be happy to discuss with you. Forward looking – we are watching the asset allocation as we approach year end for a possible rebalance opportunity as well as tax harvesting opportunities as they present themselves.

Office Update

We officially moved into our new suite at the Lincoln Center on June 15th. 

Our address is:

Lincoln Center Tower
10260 SW Greenburg Rd.
Suite 1055
Portland, OR 97223

Our office building is the tallest (12 story) building in Lincoln Center, so it should be easy to recognize.  I have attached a photo taken from our office of the wonderful fall colors.  We look forward to seeing you soon.

Our Mariya Brannon has just earned her Financial Paraplanner Qualified Professional (FPQP) designation earned through the College of Financial Planning.  Mariya is a very important member of The Opsahl Group and we want to recognize her for her hard work and success.

WHAT IS A FINANCIAL PARAPLANNER QUALIFIED PROFESSIONAL TM DESIGNATION?

Individuals who hold the Financial Paraplanner Qualified Professional TM, FPQP TM designation have completed a six-month long course of study encompassing the financial planning process, the five disciplines of financial planning, general financial planning concepts & terminology and product categories.

Additionally, individuals must pass an end-of-course examination that tests their ability to synthesize complex concepts and apply theoretical concepts to real-life situations.

OUR FPQP TM PROFESSIONALS MEET THE FOLLOWING STANDARDS:

·         Education – Designees renew their FPQP TM mark every two-years by completing at least 16 hours of continuing education.

·         Adherence to Standards – All designees have agreed to adhere to Standards of Professional Conduct as outlined by the College for Financial Planning and must reaffirm compliance biannually.

Financial Paraplanner Qualified Professional TM and FPQP TM are trademarks or registered service marks of the College for Financial Planning in the United States and/or other countries.

Sources: Information used for the performance charts was obtained from historical market data on Yahoo Finance.

A beautiful and colorful fall day taken from our offices in the Lincoln Center Tower.

A beautiful and colorful fall day taken from our offices in the Lincoln Center Tower.

Joe, Chris & Mariya

Patience & Risk

Q1 Comments

The latest volatility in the stock market could be driven in part by trade war rhetoric between the US and China.  The final real impact of a trade war on the economy and stock and bond market performance (if any) remains to be seen; but it is a reminder that the market has volatility, has historically had volatility and will most likely continue to have volatility in the future.

Historical Facts on S&P Stock Performance

In the last 90 years ending 2017 (1928-2017) the S&P 500 Stock Index has produced the following statistics:

·         9.65% Compounded Annual Rate of Return.

·         24 years out of 90 where the market had a negative annual return with

         the worst being -43.84% (1931 Depression era).

·         14 years where the annual performance was positive but below the 9.65%

·         52 years where the annual performance was above the average of 9.65% with 

          the best being 52.56% (1956 post WW2).

We believe the most intriguing of those stats is that in fifty-two of the last ninety years, the S&P 500 Stock Index performed better than the 90-year (1928-2017) average of 9.65%. Or, restated, 52 times in the last 90, the market has performed in excess of 9.65% in the calendar year. It’s difficult for us to look at the market over 90 years for a couple of reasons - 90 years currently exceeds the average human life span and how would investors have reacted during the twenty-four years where the market had negative returns.  How much did those twenty-four down years impact investor time horizons, let alone psychology?

Listed below are the stats on the S&P 500 negative return periods over the last 90 and 50 years on an annual basis, rolling 5-year average, rolling 10-year average, rolling 15-year average and rolling-20-year average.

Rolling

Rolling

Rolling

Rolling

Time Frame

Years

Annual

5 Yr. Avg

10 Yr Avg

15 Yr Avg

20 Yr Avg

1928-2017

90 yrs

24

11

5

1

0

1968-2017

50 Yrs

10

6

2

0

0

The above stats suggest that the stock market as an asset class has produced nice investment returns over time (last 90 years) but not necessarily over shorter annual periods or even rolling periods. It also suggests that investor Patience (time invested) could work toward an effort to Neutralize Risk (volatility) in the S&P 500 Index given enough time and depending on your investment time horizon because rolling 5, 10, 15 and 20 year investment periods produce fewer down periods than on an annual basis. But even the longer rolling periods of the S&P 500 Index have experienced negative returns caused by short term volatility.

Short term volatility in the S&P 500 Index will continue to plague investors in the future but will your personal time horizon allow you to wait it out as it occurs?

All of that said, we feel it lends further credibility to how we manage money, because for the most part, our client’s aversion to volatility increases as they get older. We invest for the long-term horizon, but we tactically use multiple asset classes to minimize short term volatility so that our clients don’t have to rely on patience (time) to weather the short-term volatility of the S&P 500 Index, at a time when it’s least convenient for them. 

 

 

 

Sources: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

https://truepwa.box.com/s/ly9lfzspc5vmygfkrp8f0swptlbaf4i9

Five Big Mistakes Executors Make - and How to Avoid Them

Being named the executor of a family member’s (or other loved one’s) estate is, in many ways, an honor. The decision shows that the person saw you as a highly trustworthy, capable person of integrity.

But it’s also a major responsibility that can quickly become a burden if you aren’t set up to do your job properly. The fact is, administering an estate comes with plenty of potential pitfalls that can threaten your loved one’s wealth—and your peace of mind. That goes double if the death is unexpected and leaves you reeling emotionally as you try to take on the legally required duties of an executor.

Three Reasons to Use a Professional

To avoid potential mistakes, consider consulting with a professional during estate administration. Here are three reasons why:

1.    To file the proper forms to protect the estate. Estate administration requires familiarity with the complex process, applicable statutes and tax forms. To protect an estate against costly mistakes, such as failing to file a state or federal estate tax return, consider engaging a professional to help navigate the administration process.

2.    To be protected. There are many actions you take as an executor that can put you at personal risk. To avoid these at-risk distributions, a professional can assist you by ensuring state probate and tax formalities and federal tax law are fulfilled.

3.    To protect the estate’s value. If you don’t properly protect the estate assets’ value, you could be in breach of your fiduciary duty. Consulting with a professional will help you to properly react to market conditions as they change. These actions can include selling a home, performing an estate sale or engaging a financial professional to manage the investment portfolio. The good news: You can take steps to avoid some of the biggest mistakes that executors often make and to ensure that the process goes as smoothly as possible.

First, a few basics.

At death, everything a person owns becomes part of his or her taxable estate. Estate administration is the process of managing the estate at this time—including paying off debts and any taxes due, and distributing the property to heirs in accordance with the deceased person’s wishes (or by state law if the deceased did not leave a will).

The executor is the person responsible for estate administration. If you have been named the executor of an estate, you are legally required to wrap up its affairs, arrange for the payment of any income and estate taxes, and distribute the assets of the estate.

All too often, executors without quality legal guidance make mistakes during the process of carrying out these responsibilities—mistakes that expose the estate to litigation, increased tax liability and other potentially serious consequences.

Five Mistakes to Avoid

Mistake #1: Making distributions too early

As executor, you are liable for the estate and its distributions. If you make distributions from the estate—handing out money to family members, for example—before taxes and other liabilities are paid, you are personally responsible. The same is true if you make disproportionate payments to family members. Such distributions, known as “at risk” distributions, puts you at risk—if, say, you need to get money back from a family member to pay a tax bill but that person has already spent it all.

Mistake #2: Failing to make the “portability election”

The concept of portability means a surviving spouse can make use of both his or her individual federal estate tax exemption and the unused exemption of the first-to-die spouse. Because every decedent is allowed a federal exemption of $11.2 million in 2018, this allows a married couple to shelter a combined $22.4 million from any federal estate tax liability.

However, this estate tax exemption can often cause a problem for surviving spouses when the entire estate of the first-to-die spouse is sheltered from estate tax. This key requirement is commonly overlooked because you have to ask for it. Even if no estate tax is due upon the death of a first-to-die spouse, the executor of the estate must elect portability by filing an estate tax return on Form 706 within 15 months of the death, with the filing of a proper extension. And if you don’t use it, you lose it.

Mistake #3: Failing to properly advertise the estate

The appointment of an executor and the existence of the estate may need to be advertised in a local newspaper. If there are debts owed, creditors need to be notified so they can make claims against the estate if necessary. Each state has different laws that govern the advertisement of an estate. Failure to satisfy a notice requirement may expose you personally to the estate’s creditors.

Mistake #4: Failing to liquidate securities through a market downturn

As executor, you would be responsible for managing the estate’s assets—including any stock portfolio. While you don’t necessarily need to have the financial and business acumen of Warren Buffett, failing to monitor the markets and estate investments could seriously damage the estate’s value. As an executor, you’re also a fiduciary—someone who is legally required to act in the best interests of the heirs or other beneficiaries of the deceased person and to follow the instructions the deceased person spelled out for you. That means it falls on your shoulders to ensure the estate’s financial health. That job may involve buying and selling stocks or other securities in response to bull and bear markets.

Mistake #5: Failing to properly conclude the estate

Executors who have properly distributed most of the estate’s assets often fail to properly close the estate. This may involve filing a settlement agreement with the court showing that all beneficiaries agree that they received their share of the estate or going through a court accounting process where a judge ultimately approves of the distributions.

It is also recommended to work with an accountant (or an estate administration lawyer in more complicated cases) to ensure all tax matters are concluded before the estate is finished with administration.

 

 

 

This article was published by the BSW Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2018 by AES Nation, LLC. TRUE Private Wealth Advisors, BSW Inner Circle, and AES Nation, LLC are not affiliated companies. Investment advisory services provided through TRUE Private Wealth Advisors, an SEC registered investment advisor.

TRUE Private Wealth Advisors is not a law firm or accounting firm, its representatives are not attorneys or accountants, and this article is not legal or tax advice. Individuals with questions about wills, estates, trusts, or related matters should consult a qualified attorney in the appropriate jurisdiction; questions regarding estate taxes, or tax elections of estate fiduciaries should be directed to a qualified accountant or tax lawyer.

Q1 2018

The Sure Thing

Successfully predicting the future with certainty is difficult, however, our new tax law notwithstanding, Benjamin Franklin laid out a quote (considered a Sure Thing) that still rings true to this day.

Our new Constitution is now established, and has an appearance that promises permanency; but in this world, nothing can be said to be certain, except death and taxes.” Benjamin Franklin

Even Benjamin Franklin was convinced that Death and Taxes was the only Sure Thing.

That said, if you were given the following headlines two years ago, and you had to decide which ones would come true, how many would you have been able to answer as a “Sure Thing”?  How many of these facts if you had known ahead of time would have affected your investment decision process?

·         Donald Trump inaugurated as 45th President

·         Obamacare repeals in a republican controlled Congress would fail

·         Congress would Pass Largest Tax Reform/Cut in a Generation

·         Solar eclipse covers Continental US

·         Harvey Weinstein publicly ousted for his sexual misconduct and the explosion

          of the #metoo movement that followed

·         North Korea threatens world with Nuclear missiles (again)

·         US GDP growth reaches a 3% annualized rate for two quarters in a row (1)

·         The Dow would rise 10,000 points (January 2016 thru January 2018)

For most of us mortals, the only Sure Thing was predicting the solar eclipse. However, the point of the above list is that most of what has transpired in the last two years was unpredictable and, some would argue, came out of nowhere. At the Opsahl Group, our approach to investing for our clients is to assume that anything can happen and that is why we use a multi-asset class strategy versus concentrating all our proverbial eggs in one basket. Death and Taxes are very much a Sure Thing, but not being able to correctly predict the future is also a Sure Thing and for that reason we continue to approach risk with diversification. (2)

Interest Bearing Checking / Money Market Update

What has free checking and a 1.02% (3) effective yield on all cash in the account? A Fidelity Money Market! If you’re interested in talking more about this let us know. No minimums, no maximums, pretty vanilla, government money market account with checking privileges… It just currently pays a 1.02% effective yield on all balances.

As far as all taxable accounts, we recently changed our core cash into this same money market that is currently yielding 1.02%. IRA’s were in it by default, now all accounts have joined the party!

Important Tax Information / Dates

Don’t forget you can still contribute to Roth and Traditional IRAs up until tax filing, and SEP IRAs up until extensions (if you extend).

Fidelity Dates

  • 1099-R should currently be available (retirement accounts)
  • 1099’s: Preliminary estimates by 2/17/18 and final’s no later than 3/10/18
  • Powershares K1’s will be mailed out by the second week of February.

 

 

remy.jpg

 

 

 

 

 

 

 

Footnotes:

1       First Trust, Monday Morning Outlook, No More Plow Horse (Jan. 22, 2018).

2       Past performance is no guarantee of future results; diversification does not assure a profit or protect against loss in declining markets.

3       Fidelity Government Cash Reserves (FDRXX) as of January 22, 2018. Normally, at least 99.5% of the fund's total assets are invested in cash, U.S. Government securities and/or repurchase agreements that are collateralized fully (i.e., collateralized by cash or government securities). Certain issuers of U.S. Government securities are sponsored or chartered by Congress but their securities are neither issued nor guaranteed by the U.S. Treasury. The fund stresses maintaining a stable $1.00 share price, liquidity, and income, and normally invests at least 80% of the fund's assets in U.S. Government securities and repurchase agreements for those securities. You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, have no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.

 

Q4 2017

Wills and Trusts

The foundations of your rock-solid estate plan.

For so many of us, family is paramount. You probably expect to use your wealth to take care of your family in the here and now—health care, travel, college tuition and the like. But chances are you haven’t thought nearly as much about positioning your assets so they’re ready and able to help the people you love after you’re gone. Even if you have made some headway in this area, your plan for your estate is probably a little—and maybe a lot—out of date.

If that describes your situation, don’t fret. Even if you have many moving parts to your finances, you can get on track by focusing on two main areas of estate planning: wills and trusts. Although you should discuss with an attorney your particular situation and the impact of the laws of your home state, below are important considerations for most people.

Where there’s a will, there’s a way

Read this next sentence three times in a row: Everyone should have a will.

Got it? A will should be the basic foundation of every estate plan—the starting point for a well-conceived strategy to transfer assets at death.

A will identifies precisely what you want to have happen to your assets and estate. Dying without a will means you have decided that the state knows what’s best for you and your family. In addition, dying without a will means you want to make the settling of your estate as difficult, as costly and as public as possible.

As with any decision, there are both positives and negatives to a will. That said, we strongly believe the benefits of writing a will far outweigh the drawbacks.

Advantages:

  • You decide on the disposition of your hard-earned wealth.
  • Estate taxes are mitigated—especially when the will is part of a broader estate plan.
  • You specify who the fiduciaries will be.

Disadvantages:

  • You have to accept that one day—far in the future—you just might die.
  • There is a legal cost associated with writing up a will and with estate planning.

Trust in trusts

The second component of a smart estate plan is often a trust. A trust is nothing more than a means of transferring property to a third party—the trust. Specifically, a trust lets you transfer title of your assets to trustees for the benefit of the people you want to take care of—aka your selected beneficiaries. The trustee will carry out your wishes on behalf of your beneficiaries.

WILLS AND TRUSTS COMPARED

Broadly speaking, there are two types of trusts: living (established while you are alive) and testamentary (created by your will after you’ve passed). Living trusts are becoming more and more popular to avoid the cost of probate. In the probate process, your representatives “prove” the validity of your will. The probate process also gives any creditors the opportunity to collect their due before your estate is passed to your heirs. There may be a long delay in settling your estate as it goes through probate. To add salt to the wound, probate can be costly.

A living trust can avoid or mitigate the effects of probate. It is a revocable trust that you establish and of which you are also typically the sole trustee. The assets in your living trust avoid probate at death, and are instead distributed to your heirs according to your wishes.

Living trusts are sometimes said to be superior to a will, but that is certainly not the case for everyone. It’s important that you understand how they compare.

Is a trust for you?

  1. Are your beneficiaries unwilling or unable to handle the responsibilities of an outright gift (investing the assets, spending the gift wisely, etc.)?
  2. Do you want to keep the amount and the ways your assets are distributed to heirs a secret?
  3. Do you want to delay or restrict the ownership of the assets by the beneficiary?
  4. Do you need to provide protection from your and/or your beneficiary’s creditors and plaintiffs?
  5. Do you want to lower your estate taxes?

If you answered “yes” to any of the five questions, you may find it beneficial to set up a trust.

Comparing Wills and Living Trusts

Wills

  • Are viable only at death.
  • Are public.
  • Are not very good when you’re dealing with more than one state.
  • Must go through probate.
  • Are less expensive to put in place.

Living Trusts

  • Can have uses while you’re alive.
  • Are private.
  • Are good in every state and not encumbered by states.
  • Can generally avoid probate.
  • Are more expensive to put in place and administer.

Is a living trust for you? It depends on your particular situation. Nevertheless, you should certainly consider it in consultation with your advisor or wealth manager.

Your next move

We recommend that your estate plan be reviewed every year or two. The review should be conducted by a high-caliber wealth manager or tax professional—one who takes the time to learn what’s changed since you put your solutions in place, assess how those changes might impact your strategy, and make recommendations for getting your solutions current and in accordance with your wishes.

 

 
 
 

This article was published by the BSW Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2017 by AES Nation, LLC. TRUE Private Wealth Advisors, BSW Inner Circle, and AES Nation, LLC are not affiliated companies. Investment advisory services provided through TRUE Private Wealth Advisors, an SEC registered investment advisor.

Office Move & Equifax Security Breach

Dear Clients & Friends,

We’ve been fielding a lot of incoming inquiries regarding the Equifax security breach and how to protect yourself from identity and asset theft. We wanted to get information out to you as quickly and concisely as possible, but there has been a constant flow of new information coming out (and will potentially continue to come out) since the breach took place. After pouring through as much information as we can, the most comprehensive article we found was from Consumer Reports, linked here: https://www.consumerreports.org/equifax/how-to-lock-down-your-money-after-the-equifax-breach/

This breach emphasizes security measures we’ve talked about in the past, as well as talks about credit specific measures you can take to protect yourself and your families. We highly recommend you read this article before coming up with your identity protection strategy. If you’d like to discuss your situation with us, please don’t hesitate to call in.

Outside of the Equifax Security Breach, we also want to announce our office location move. We mentioned it in our last Newsletter, but wanted to specifically mention it in the subject line of this to increase awareness.

We are now located at:

Lincoln Center Towers
10260 SW Greenburg Rd
Suite 406
Portland, OR 97223

This move comes after a combined 50 years of time spent in downtown Portland and was not made quickly or easily. We’re in the process of negotiating a lease at a permanent home but, for now, our current address is listed above, on our website and in all of our email signatures.

Thank you!

Joe, Chris & Mariya

Q3 2017

Change Is Constant

“Change is the law of life. And those who look only to the past or present are certain to miss the future.” John F Kennedy
 
“It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” Charles Darwin
 
“The ones who are crazy enough to think they can change the world, are the ones who do.” Steve Jobs

We Moved Our Office Location

After much thought and consideration, as well as a combined 50 years spent working in downtown Portland, we have decided to CHANGE our office space location to no longer be downtown. Beginning on September 1st, our offices will be temporarily located in the Regus Office Center at Lincoln Center Tower on Greenburg Rd, adjacent to Washington Square. We are in the process of negotiating a long-term lease.  There were many factors that played into our final decision to make this CHANGE: parking availability for our clients and for us, downtown traffic, the homeless problems in downtown Portland, parking costs, taxes, and soaring downtown office rent. Over the time spent in downtown, we always felt like the location was expected of us. However, over time, we’ve heard from our clients and most were indifferent about our downtown location. The final contributing factor to the change is that another group of advisors will be joining TRUE in the coming months and they echoed all the above reasons for wanting to get out of downtown Portland. 
The central theme of the above quotes is to welcome “CHANGE” and not fear it. CHANGE in all aspects of life will happen no matter how much we embrace or fear it. The more positive approach is to know how you will respond to the CHANGE and face it head on. As the old US West commercial once said, “it’s better to make dust than to eat dust”. At the end of the day, we believe our CHANGE of location will be better for both our clients and The Opsahl Group of TRUE Private Wealth Advisors. Our new location has plenty of covered parking for you and us.

Our new address:

The Opsahl Group
TRUE Private Wealth Advisors
10260 SW Greenburg Rd. Suite 406  
Portland, OR. 97223                                           

Fidelity Statements Change

You may have noticed in the last month or so a new charge showing up on your statements – “Asset Fee Paid 2017 ## Asset Based Fee” The ## signifying the month they are charging you for. This is a fee that we used to collect as part of our quarterly charge. When Fidelity started billing it directly, we reduced what we collected in-kind so the net outcome to you is exactly the same as before the change. The only affected accounts are ones where we are running our portfolios for you – your checking accounts and unmanaged accounts remain unchanged.

Current Managed Account Asset Allocation Order

Domestic Equity
International Equity
Fixed Income
Cash
Alternatives
Currency

Q2 2017 Newsletter

The Kind of Uncertainty

We Can Live With...

Not long ago one of our clients was in our office, and as we discussed their portfolios, market conditions, outstanding risks and thoughts on the future, they asked how the risks of today are different than the risks of years past. We thought that was a great question and wanted to share with you our perspective on it.

The level of uncertainty and certainty that surrounds each of us daily, and how we deal with it, can be summed up in the below listed quotes.

 

The quality of your life is in direct proportion to the amount of uncertainty you can comfortably deal with.

Tony Robbins

The longing for certainty ... is in every human mind. But certainty is generally illusion.

Oliver Wendell Holmes

Market/Portfolio Commentary

The only thing we know for certain is that uncertainty in the financial markets is ever present. What we are hopeful for, and what we believe we are seeing now, is a shift away from focus on systemic risk in the financial markets that has been in the crosshairs since 2008 and a return to a focus on unsystematic risk in the system.

Systemic risk threatens the underpinnings of financial markets and can affect all asset classes, where it’s difficult to anticipate or avoid.  Some examples of systemic risk concerns since 2008 include: looming government/municipality defaults, federal reserve keeping interest rates at or near zero, global central banks experimenting with negative interest rates, governments purchasing financial assets to prop up their respective markets, BREXIT’s impact on the Eurozone and the 2016 US Presidential election. These were major, systemic threats of the last nine affecting the financial markets. The presence of systemic risk can paralyze the investor’s ability to make unemotional short term decisions.  Fortunately, it appears that the global governments navigated these uncertain waters without sinking the ship (as evidenced by global stock exchange prices now versus 2009) and it’s possible that these systemic risks are in the rear-view mirror.

Unsystematic risk, on the other hand, is the normal ongoing risk where an investor can take appropriate action to protect portfolio value.  Normal ongoing risk could include direction of interest rates, inflation, tax policy, regulations, consumer demand, politics, unemployment rate, industry or sector issues, etc. You can take proactive steps to protect nonsystematic risk by diversification, whether by asset class or by security.

We believe we’ve entered a period of systemic risk has abated and normal risk continues. We have reviewed our portfolios weightings in the past and found that when we have entered a period of systemic risk uncertainty, the top three asset classes in our model portfolios are nearly equal weighted (indicating no conviction); whereas when we are back to a more normalized market where we’re only dealing with unsystematic risk, the top three asset class weightings are not equal weighted but rather spread differential widens (indicating more conviction of one asset class over another).  The changes in our model portfolios have taken this shift into account.

As Tony Robbins and Oliver Wendell Holmes so eloquently stated above; no one likes uncertainty, but it’s important to understand that it exists and it will continue but you need to adapt yourself so you can live with it.

News Update:

Chris and his wife Libby received her medical school match news on March 17th; Libby was accepted into the OHSU Emergency Medicine Residency program! They were fully expecting to have to move as far away as Philadelphia, so this came as a huge and welcome surprise (especially for Joe). Libby will be in Emergency Medicine training for the next three years and then will embark on her career.  We are so glad that they’ll be in Portland.

Five Things You May Not Know About Joe:

1.    He is 5th of 6 boys. He has no sisters.

2.    His older brother is married to his wife’s older sister. (It’s legal)

3.    Opsahl is a Norwegian name.  Joe’s Ancestry DNA is: 67% Scandinavia, 9% Finland/NW Russia, 9% Irish and 8% Scotch.

4.    His original intent in college was to obtain a dual degree in Accounting and Administration of Justice and join the FBI.  He dropped the latter degree and the FBI.

5.    He was born in Longview, WA. Moving to the Milwaukie area when he was 14 and graduating from Rex Putnam High School.

Q1 Newsletter

Taking a Hint from Yogi Berra

The infamous Yogi Berra once stated that, “You can observe a lot by just watching.” Following simple advice like this from Yogi may seem silly and nonsensical, but sometimes it’s what you need to do to understand what’s happening around you. Watching and learning is exactly what we’ve done when reflecting on 2016.

Portfolio Update

In past newsletters, we discussed “flattening” of the asset classes that comprise our model portfolios. Flattening refers to giving equal weight to particular asset classes, and is a signal of "no conviction” in the market, up or down. Flattening is a response to market uncertainty or instability that can be caused by a variety of factors. In 2016, in response to events such as the interest rate capitulation by the Fed and other central bankers, along with BREXIT and the US Presidential election, we moved to flatten (weight equally) the top three asset classes in our model portfolios. Although prudent as we analyzed the market and economic factors at the time, one risk of flattening is that one or more of the flattened asset classes will experience unexpected under-performance or out-performance. Sure enough, in 2016, that’s what happened with the unexpected out-performance of domestic equities, which led to the under-performance of our strategy.

2017 and Early Signs of a Return to Normalcy

Within the first 4 trading days post US elections, our relative strength analysis detected separation in all asset classes, prompting us to change asset class weightings in our model portfolios. This shift is already having a favorable impact based on the early signs in our models. We are hopeful that this shift away from flattened asset classes will ultimately lead to a return to normalcy for investment returns. Because as Yogi also once said, “It ain’t over till it’s over.”

Bob Doll’s 2017 Report

We are pleased to provide again this year Bob Doll’s 2017 report in which he looks back on 2016 and looks forward to 2017. We received many positive comments about last year’s report and hope you will find this year’s equally useful.

Tax Season

Quick note that tax season is right around the corner! Fidelity documents have already started coming in depending on account type (mostly IRA). Trusts, Joints and Individual accounts preliminary 1099s will be coming in on 2/18 with final 1099’s coming out on 3/4. If you or your accountant have any questions on tax statements coming in, please contact us!

Retirement account contributions – it’s not too late to contribute for 2016! If you are looking to fund Roth or Traditional IRAs, or your other retirement accounts not held with your employer, please let us know and we can discuss your options regarding those accounts!

Personal Updates

Chris and Libby have expanded their family by one! They adopted a new puppy last weekend, pictured below. His name is Remy!

Remy.jpg

Amended Post Election Update

In our post-election Q4 newsletter we discussed the issue of the flattening of the various asset classes, where the allocation differences between our top three asset classes were negligible percentages. Under normal market conditions where markets are not preoccupied with uncertainty, you typically have a larger dispersion in asset class weighting, somewhere between 10 to 15 percent between the first and third asset classes.

Domestic equity, as an asset class, over the last 18 months has been profitable but not without a tremendous amount of volatility both up and down. The performance of this asset class has been largely driven by action (or inaction) by the Fed as we mentioned in our last newsletter. However, since election day, we have seen separation in asset classes where the difference between #1 and #3 has quickly widened to 10%.

We have responded, and rightly so, to the separation within asset classes and have made some TACTICAL adjustments to our model portfolios. On November 30, we executed a rebalance of most of our models to bring them in line with today’s relative strength structure, which favors domestic stock handily, with alternatives/commodities, fixed income, international, cash and foreign currency rounding out the remaining order.

Note: "TACTICAL" is defined as of or relating to tactics; small scale actions serving a larger purpose.

Since the election we’ve seen a number of positive themes emerge – interest rates have come up which will allow banks and insurance companies to make money on spreads, materials/industrials have picked up due to promises of renewed infrastructure spending, and at a broader level we’ve seen the deregulation promises flow positively into a number of sectors. Even though rising rates have had some negative implications historically, higher rates can trigger the banks’ willingness to loan more money which creates a multiplier effect on money supply in the hands of business and consumers. That is also why we added the community bank index fund into the domestic equity sleeve of our portfolios in a matter of days after the election.

Performance, or lack thereof, over the last 18 months has been a very frustrating thing for us as portfolio managers. The financial markets rarely make sense over the short term and that is why asset allocation, or in our case tactical asset allocation, can be a powerful portfolio management tool during times of market uncertainty and volatility. While achieving investment returns is important, preserving capital while minimizing volatility is also important. 

We still stand by the statement: “Investors hate losing money more than they enjoy making money and their memory of losing money is far better than their memory of making money.”

As always, feel free to reach out to us with any questions or concerns on the above. We’d be happy to discuss further and how it applies to you, specifically.

Happy Holidays to you all, and a Happy New Year if we don’t connect prior!

Best regards,

        Joe, Chris & Mariya

Q4 2016 Newsletter

Just Ask Al Roker

What a rollercoaster of a week we had last week! As we listened to same-day election coverage, many financial experts indicated that the stock market would take a dive on a Trump victory, whereas it would be flat to up on a Clinton victory. Late on the election night when it looked like a Trump victory, market futures were plummeting towards a negative 800-point opening. Yet, despite a Trump victory Tuesday evening, the market opened calmly Wednesday morning and was up for the day. On the next-day election coverage, Matt Lauer and Savannah Guthrie of the NBC’s Today show were trying to make sense of the stunning Trump upset victory over Hillary Clinton, when they broke for a weather update from Al Roker. Al, with a smirk on his face, responded: “now you know what it’s like to be a weatherman.”

What we’re trying to say is predicting the future is virtually impossible, whether it be the stock market, elections and certainly the weather.

The domestic stock market may be one of the best performing asset classes for the last seven years but it hasn’t been without a lot of volatility both on the upside and the downside. In fact, most of the return since the 2008 financial panic can be sourced back to days the Federal Reserve has announced policy decisions. As noted by Ruchir Sharma in his Opinion Commentary in the WSJ dated 9/28/2016, 60% of stock market gains have come from Fed announcements days. Sharma asserts further, “This is a sign of dysfunction. The stock market should be a barometer of the economy, but in practice it has become a barometer of Fed policy.”

Although the dysfunction can be traced back to 2008, it’s become more and more apparent in the last couple of years. From our perspective, this really hit its stride beginning in March of 2015. At this point we not only witnessed the beginnings of major shifts in asset class order, but also a flattening of top asset class weightings in our model portfolios. Within the context of our six asset class universe and an orderly market, it’s not unusual to see 15% weighting differential between asset class 1 and asset class 3. However, over the last year, we have seen a flattening of asset class weightings, where the difference recently has been as low as 1% and has recently expanded to 2.3% between asset class 1 and 3. Not only is this a relatively rare occurrence historically, it’s also been rare to have it be this prolonged. This is telling us that there is no strong conviction towards any one asset class as compared to the next and risk and uncertainty still exists in the market.

Now that the election is behind us, we can finally look beyond to some of the next milestones our economy has in front of it:

·   Federal reserve wanting raise short term interest rates and start easing off of the monetary policy gas pedal.

·   President-elect Trump wanting to lower taxes on individuals and corporations to jump start the economy; rebuilding the military; slowing down government regulations and bureaucracy.

·  As those two points come to fruition, seeing how this translates out to the global economy and if it can jump start the global economy or if we’re in for another long period of domestic dominance.

Our investment philosophy of tactical asset allocation using relative strength is based on time tested data. The objective of our investment strategy is not attempting to predict the future, rather it’s trying to identify risk or potential volatility in a portfolio and remove it. It’s predicated on using data to overweight or underweight asset classes and identifying purchases and sales based on these risk factors.

We can’t predict the future but we will continue to manage our portfolios using our objective based system of identifying risk and removing it from the portfolio. We will continue to identify those asset classes that warrant overweight and those that need to be underweighted or eliminated.

Chris Passed His CFP®!

After completing six masters-level courses, Chris was eligible to sit for the six hour Certified Financial Planner exam. After successfully passing the exam and completing their other various requirements, Chris obtained the CFP® designation. We’re thrilled to be further melding Chris’ and Joe’s planning backgrounds together on behalf of our clients. Between Joe’s extensive tax background and Chris’ planning experience, we feel more confident than ever that we are positioned to add continued value to our clients that goes beyond investment management.

Wishing everyone a happy thanksgiving!

The Opsahl Group 

Joe, Chris & Mariya

Q3 2016 Newsletter

Market Commentary

We're not trying to beat a dead horse here, but the financial markets have continued to be challenging since March 2015. We believe that most of the activity over this time frame has not been driven by the fundamental forces of a strong and vibrant economy, but rather from actions (or inactions) by central bankers both domestic and abroad. Daily market volatility in both stock market valuations and interest rate movement on the 10-year Treasury has been the story as of late. 

To illustrate that point, we went back and looked at the volatility of both the stock and the bond market form the start of the year. The S&P 500 Stock Index was down 10.84% after the first 28 trading days of the year ending February 11th, 2016; During the first six months of this year, there have been 19 days where the index was up 1% or greater for cumulative return of 30.29%; but it also had 19 days where the index was down more than 1% for a cumulative return of -31.12%. 

10-Treasury Bonds have been equally volatile. Yields have been as high as 2.27% and as low as 1.49% and everywhere in between before hitting the yearly closing low of 1.37% on July 5th. 

We foresee continued market volatility to be the dominant story going forward and that's why we believe using our tactical, relative strength driven asset allocations (with up to six classes) for managing volatility is the preferred strategy in the current environment. 

New Opsahl Group Website

Please check out the new Opsahl Group website at www.opsahlgroup.com. It can also be accessed by www.togpdx.com ("tog", which are the initials for The Opsahl Group; and "pdx" for Portland). One of our most exciting new features on the site is the client login page. Gone are the days of losing addresses of the various sites we have you using! Now, you can click on "client login" and access your Fidelity, BlueLeaf, MoneyGuidePro or Betterment Institutional accounts all in one place. We hope you enjoy the new design and would welcome any feedback you may have on the site design, the navigation or the messaging that we've put together. We've been quietly working on this site since the beginning of the year and hope you like it as much as we do! You can still access our site through the TRUE Private Wealth Advisors, www.truepwa.com, which has also been redesigned to better message our business model at TRUE. 

TRUE Named to Financial Times 300

The Financial Times announced their FT 300 RIA list on June 16th, 2016 and for the second consecutive year TRUE Private Wealth Advisors is one of 300 firms named to the national list. The Financial Times selected firms based on: assets under management growth; years of experience; compliance record; industry certifications and online accessibility. TRUE was only one of three firms from Oregon selected by the Financial Times. Click here to view the article

Portfolio Update

As of last writing, we have seen further weakening of domestic equity (but at a much lighter magnitude) and further increases in Alternatives/Commodities (also at a much lighter magnitude). The current ranking isn’t totally representative of allocations, as the 1st through 4th asset classes have very little disparity between them (less than 4%) and the 1st through 3rd asset classes are all within 1.5% of each other. The current order is:

  1. Alternatives/Commodities
  2. Fixed Income
  3. Domestic Equities
  4. Cash
  5. Currency
  6. International Equities

As always, don’t hesitate to contact us to discuss our portfolio structure, changes, etc. directly and we’d be happy to discuss in more detail as it pertains to your accounts.


Data sources: Yahoo finance; Financial Times

TRUE Private Wealth Advisors Named to 2016 Financial Times 300 List of Top Registered Investment Advisers

June 16th, 2016 – TRUE Private Wealth Advisors is pleased to announce it has been named to the Financial Times 300 List of Top Registered Investment Advisers. The List recognizes top investment advisers from across the U.S. This is the second year TRUE Private Wealth has been named to the FT 300 List after having been named to the 2015 FT 300 List. TRUE Private Wealth Advisors is a member of Dynasty Financial Partner’s Network of Advisors.

Q2 2016 Newsletter

We’re halfway through the second quarter and the Q2 newsletter is finally here! We’ve packed it with market/portfolio commentary and information about online FRAUD and protecting yourself from it, as one of our clients was just a victim of such potential FRAUD that was, fortunately, thwarted. 

Protecting Yourself Online

In the wake of an attempted $75,000 fraudulent wire transfer two weeks ago, we felt compelled to share what we know on how to protect yourself online. A number of our clients have asked us for further help in securing their online presence, and we invite all of you to take us up on that. If this is something that concerns you, don’t hesitate to give us a call before we call you!

Your email is the gateway to your online life – make sure it’s protected! Think about the process most websites have for resetting a password: “check the email we have on file for a reset link”. In addition to that, have you have been emailed a document that contains your signature, social security number, date of birth and/or street address? If someone gets access to your email, they get access to your inbox history as well. This can include signed documents where they can lift the signature off of it and reuse it, social security numbers, date of birth, account numbers, etc. All of this information can then be used to fill out money transfer request forms. The attempted fraud happened through our client’s email being compromised and seeing that they worked with us, then typed up an email that looked like it could have easily been from the client.

Market Commentary 

With Q1 and the first half of Q2 in the rear view mirror, we’ve had quite a ride in the markets. The S&P500 has moved 69% through 5/12/16 in absolute terms, yet it is only up about 1% year to date. The EAFE (international markets) has moved a hair shy of 90% year to date as well, and yet it is only down around 4%. The blended decline in reported earnings from the 91% of the S&P500 that have reported is negative 7.1%. This is also the first time since 2008 where the companies that make up the S&P500 have reported four consecutive quarters worth of year-over-year earnings declines since ‘08/’09. One bright spot shines through when you remove the energy sector from the earnings and the declines are closer to zero or low single digits. However, the impact of a single sector on the S&P500 was the same in 2008 when financials were removed. For more information on this earnings season or mid-2008, please see the links below.

The last 14 months have been challenging not only for the financial markets but also for our model portfolios. It’s been challenging because no one asset class is standing out and there has been more up and down volatility than normal within the domestic and international equity markets. We would like to think that our model portfolios will always perform better than the markets no matter the time frame, but the reality is that no one can predict the near term direction of the markets. We use asset allocation to lessen the volatility and that can make our near term performance lag a specific market index. We advise our clients to take a longer point of view whether it’s a 3, 5 or 10 year rolling average.

The performance and volatility figures are derived from the links below which we believe to be accurate. Past performance is not a guarantee of future results.
EAFE source (ex-dividends)
S&P source (ex-dividends)
S&P 500 earnings info
2008 S&P 500 earnings info

Portfolio Update

As of last writing, we have seen further weakening in the domestic equity and international equity markets, as well as increases to cash, commodities and foreign currency. The current order of asset classes is outlined below. For more specific information about your portfolio, please contact us directly as updates for every model would be too wordy for this newsletter.

  1. Fixed Income
  2. Domestic Equity (was 3rd in February/March/April)
  3. Cash (was 2nd in February/March/April)
  4. Commodities (was 5th in February/March/April)
  5. Currency (was 4th in February/March/April)
  6. International Equity

Independence Day For Wealth Advisors

Portland Business Journal

A Portland wealth management firm says it's at the forefront of a wave of brokers leaving large national firms for more independent boutiques.

True Private Wealth Advisors opened in Salem in August 2012. It's since grown to $560 million in assets under management and a footprint that includes a 2,600-square-foot Portland office in Big Pink.

"We've had good traction in the marketplace," said partner Brett Davis.

The firm works with Dynasty Financial Partners, one of three large companies that provide the back office infrastructure for financial advisors seeking to leave giant firms.

"Part of our business model is to hire advisers who worked for the big firms and help them go independent," said True Private partner Joe Opsahl, a 30-year industry veteran.

Opsahl said the model gives advisers more flexibility in terms of product offerings and makes it easier to serve the interests of clients.

"Independence is so much better than being in this top-down world when you're dealing with a single provider," he said. I haven't been this excited since I first got in the business."

True Private Wealth works with investors with at least $100,000. Most clients have more than $1 million.

Q1 2016 Newsletter

Happy New Year!

We hope this finds you hitting the ground running into 2016. It’s hard to believe it’s already here. In light of a challenging 2015 investing landscape, we wanted to take some time to reflect on the year and the various pieces that brought it together. We’ve linked out to a few articles below from trusted news sources and provided some commentary following the links.

“2015 was the hardest year to make money in 78 years” CNBC

“The Year Nothing Worked: Stocks, Bonds, Cash Go Nowhere” Bloomberg
 
As the above clickable headlines reveal, we all should be glad to see 2015 come to an end. It was one of the most challenging years to make money using asset allocation, let alone attempting to pick one asset class over another on a timely basis. Even Warren Buffett’s Berkshire Hathaway was down over 11%. Looking to the bond market, which is considered a relatively safe investment market, even it barely eked out a flat year.
 
Even though some pundits have said 2015 turned out to be the worst year since 1938 for all asset classes, the one thing that will continue to be a constant in our global economy is the volatility and unpredictability of asset classes along with the need to be over weighted in some and under weighted in others. This is why we continue to believe in the long-term benefits our tactical asset allocations portfolios and strict sell discipline provide for our clients.

Tax Time

With every New Year comes a new tax season. That means a couple of things for everyone: PRIOR year contributions for Roth and traditional IRA accounts (where applicable) and collecting 1099 forms from all of your custodians. If you’d like to talk through whether or not Roth / traditional IRA contributions make sense for you, please don’t hesitate to get in touch. If you’d like assistance tracking down your 1099’s for the accounts you have with us, we’re more than happy to get those sent over to you digitally. Please don’t hesitate to contact us! We’re happy to coordinate with your trusted advisors as well.

Portfolio Updates

Our portfolio asset allocations have remained largely unchanged since our last Newsletter in late October. Please contact us if you’d like to discuss further!

Bob Doll Predictions

As we mentioned in our first newsletter of 2015, we like to kick off the New Year by reading Bob Doll’s predictions for the coming year. Bob is currently the chief strategist for Nuveen Asset Management and prior to that had a very long career with Blackrock and its predecessor Merrill Lynch Asset Management. Unlike most people who try to predict the future, Bob also reviews his previous year forecast. To access his 2016 predictions click here.

Q4 2015 Newsletter

For this quarter’s newsletter, we wanted to share a link to the past. It allows you to look back at dates to see a glimpse of what was happening in the world at that time. Did you know a stamp was only $0.03 in 1950? Gas was $0.27/gallon! Take a look at it here.

Portfolio Updates

The third quarter of 2015 was the most active portfolio quarter we’ve seen in years, both in asset allocation and in sector changeover. We saw international rotate from the second most favorable asset class down to the fifth, and cash moving up to third from fifth.

The current asset class order as of November 1, 2015 is:

1. Domestic Stocks

2. Bonds

3. Cash

4. Currency

5. International Stock

6. Alternatives

There has been a major shakeup relative to how we started the year.
 
At the start of 2015 the asset class order was:

1. Domestic Stocks

2. International Stocks

3. Bonds

4. Cash

5. Currency

6. Alternatives

From a sector standpoint, we saw a lot of rotation within domestic stock, international stock and bonds.
 
All of these trades are driven by our tactical, rules-based approach to our model portfolios. Every trade we’ve made this year took place due to the position hitting our pre-defined sell target.
 
As far as future outlook goes, our portfolios remain conservatively positioned relative to how the year started. Three of our four models have an emphasis towards cash as we saw relative strength movement towards protective (bonds, cash, and currency) asset classes during August and September.
 
As always, please contact us if you’d like to further discuss recent changes, our underlying management approach, forward outlook, or anything in between.

Social Security in The News

With the recent budget bill passing, Social Security strategies were affected for people that are approaching retirement. We have attached a Q&A on the impact of Social Security that was published by Forbes and you can access it by clicking here.

Q3 2015 Newsletter

Online Security Blurb

In the wake of numerous headlines on data security breaches, we felt compelled to share what we know on how to protect yourself. A number of our clients have asked us for further help in securing their online presence, and we invite more of you to take us up on that. Three basic things we’ll leave you with are:

1.   Your email is the gateway to your online life – make sure it’s protected! Think about the process most websites have for resetting a password: “check the email we have on file for a reset link”. In addition to that, have you have been emailed a document that contains your signature, social security number, date of birth and/or street address? If someone gets access to your email, they get access to your inbox history as well.

2.   Phishing emails: You’ve probably heard this term at one point or another, but what does it look like when you receive one? It could be a number of different things, including a close but not exactly right email address: chris.hatfield@truewwa.com – one letter off my actual email address. It could also be a link that takes you to a fake website, asking you to login to verify your username and password are still active: https://www.chase.com. Hover your mouse over the chase link and you’ll see it’s actually pointing to www.truepwa.com (or if on an iPhone, hit and hold the link until a set of options pops up, showing the true location of the link). This can be used to take you to a “look alike” site where they’ll ask you to login using your banking credentials. Then they have them stored in their database. The most common, however, is someone sending a link to a malicious website and not really trying to hide what they’re doing. Those are the easiest to spot and avoid. 

3.   Steps to protect yourself from the two above threats:

a.   Make your email password complex. Use a mixture of uppercase/lowercase letters, numbers and symbols.

b.   Setup multi factor authentication on every website you can – email, banking, investing, social media, etc. See a list of supported sites at https://twofactorauth.org/. Multi factor authentication ties a secondary, one-time-use password to your phone through a text message or a code generating application (google authenticator, Symantec VIP Access, etc.). This is important because if someone in China were to log into one of your protected services, they wouldn’t be able to complete the login without your device that produces/receives the multi factor code.

c.   Check suspicious emails for the items listed in #2. Keep in mind that NO bank or other institution will ever ask you for your username and password via email.

d.   Start using a password managing system: dashlane.com, lastpass.com, etc.

e.   Call us and setup time with Chris to get help in implementing and/or understanding some of the above steps.

Portfolio Updates

The second quarter of the year was a challenging quarter due primarily to Greece default concerns then further by concerns over a slowing Chinese economy. In the meantime, we’ve seen Fixed Income continue to be challenging with the 10 year rate fluctuating from 2.17% at the start of the year, down to 1.673% leading into February then up as high as 2.478% in June and currently sitting at 2.18%. This volatility has presented its own set of challenges in the fixed income space as the world tries to predict what the Fed will do with rates this year.

Doggy Monday

Sometime in the second quarter of 2015, we started “Take your dog to work day” in our Portland office. Mariya brings in her two miniature long haired dachshunds, Leah & Kody, and Joe brings in his standard poodle, Rosey, that Joe’s family adopted last November (All pictured below). As Rosey works on expanding her social skills with other dogs, our Monday meetings have been able to meet the extended staff of True in Portland. Stop by sometime and say hi!