The Market With virus cases spiking, why is the market not trading back like it did in March? A couple of points to make on that question. One, the market knows that it is unlikely that we will have to go into another lockdown. Two, hospitals are better prepared to take on new virus […]

At Fi Plan Partners, we offer a wide range of services to our clients. We use a Democratized Family Office approach which makes the process seamless and more comfortable. It is important for us to provide you with the most personalized advice and services, customizing our personal communications and technology to meet your needs. We take away any anxieties you may have about your financial future so that you can enjoy a life that is Better, Richer, Fuller.

Watch our President and CEO, Greg Powell, explain what all you can expect from our firm and how we stand out from all the rest.

 

Greg Powell, CIMA®

President and CEO

Wealth Consultant

Email Greg Powell here

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

Economic forecasts set forth in this presentation may not develop as predicted.

No strategy can ensure success or protect against a loss.

Stock investing involves risk including potential loss of principal.

Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a registered investment advisor.

The post Our Unique Approach appeared first on Fi Plan Partners.

The post Our Unique Approach appeared first on Fi Plan Partners.

1981 At first, everybody was excited to learn that the Federal Reserve had dropped interest rates so low. They immediately thought about their mortgage rates and how low loan rates might go and how that could help the economy. We thought it was time, now, to talk about the coming months where people are […]

1981

At first, everybody was excited to learn that the Federal Reserve had dropped interest rates so low. They immediately thought about their mortgage rates and how low loan rates might go and how that could help the economy. We thought it was time, now, to talk about the coming months where people are starting to ask about their income and what interest they are making on their money. When Greg Powell started his career in the business in 1981, the 30-year Treasury rate was at 14%. Today that same rate is 1.4%. If you ever visit the office at Fi Plan partners, you will see a bond issue hanging on the wall that Greg did when he was the Head of Public Finance in his early years. This was his first bond issue ever and it was in the town of Loxley, AL. It was paying 9.5% tax-free at the time. Think about that. Mortgage rates were in the double digits and here we are now, many years later, with interest rates around 0% and the 30-year Treasury paying 1.4%. What a difference time has made.

Dividend Income

Dividends and income are important pieces in building investment portfolios. Going back to 1982, dividend income accounted for over 25% of the annualized total return of stocks. Right now, over 70% of S&P 500 companies have dividend yields greater than the 10-year Treasury. The 10-year Treasury rate currently stands at 0.66% and the 30-year Treasury stands at 1.42%. The average yield of the S&P 500 is 1.96%. So obviously stocks are riskier than the treasuries. For some investors, looking for income in this market, there is no alternative because right now stocks and corporate bonds are really the only places to get significant yield right now. One of the reasons that stocks remain attractive in portfolios is because of the income that they produce. It’s one thing to say you need to borrow money at these rates, but it’s another thing to say that you need your portfolio to be generating income for you. People that are retired or looking to retire fall under this category. This emphasizes the importance of the Financial Blueprint that we do here at Fi Plan Partners. Whether you are close to retirement or already retired, we look at how to generate that income for you to live off of. Moving forward we are going to be keeping a close eye on this because, right now, the forecast is that we do not see rates going up anytime soon.

Inflation vs Deflation

Over the long term, you really want your money to at least keep up with inflation so that you are not losing money by investing. Traditionally speaking, the 10-year Treasury long-term government bond yield is very safe, and you want to at least be able to get your money back net of inflation. With extremely low rates last week, we saw the 10-year Treasury yield drop from .9% to 0.7%. Interest rates can continue to fall, but surely, they are not keeping up with inflation at those low rates. However, we got some interesting points from both the consumer price index and the producer price index for May. Those price indicators fell which indicates deflation, not inflation. Even though at rates are as low as a fraction of a percent, you are still outpacing inflation. It’s just that you’re not getting a lot of return out of it. Without inflation, there is no push to get interest rates higher because even at zero, if you have deflation, interest rates are keeping up with the cost of money. This is something we are watching very closely. If people see all the government stimulus, all the money being issued and spent by the Federal Government, the treasury, etc., surely that will cause inflation. As we saw the economy reopening, month-over-month, and May vs April, prices did not rise like expected. Prices actually continued to fall. Even though the market’s reopening and even though we put a lot of stimulus into the economy, typically that would be indicative of some inflation coming down the road, but we are seeing the opposite which is deflation. Long-term deflation ca[...]

In this pandemic, with all the economic situations going on, it’s important to know where you are with your money and to know that you are on track to meet your dreams and goals. Here are a few important things to consider when thinking about your Financial Blueprint: First ask, “Why is money important […]

In this pandemic, with all the economic situations going on, it’s important to know where you are with your money and to know that you are on track to meet your dreams and goals.

Here are a few important things to consider when thinking about your Financial Blueprint:

First ask, “Why is money important to me?” 

Set financial goals based on your “why”

Assess your current financial situation

Track spending by using budgeting

Save as much as you possibly can

Invest wisely to let your money and savings work for you while mitigating risks

Fine-tune and optimize your plan by ensuring you focus on the details of the following:

Cash flow management

Risk management

Investment planning

Tax planning

Retirement planning

Estate planning

Building Your Financial House® is an important part of having a strong foundation. This is a great time to take action to make sure you are on the right path to living a Better, Richer, Fuller life. Watch the video to learn more! 

 

Greg Powell, CIMA®

President and CEO

Wealth Consultant

Email Greg Powell here

Jay McGowan, CFP®, CPA, PFS

Senior Vice President

Director of Financial Planning

Email Jay McGowan Here

Yvette Maddox

Financial Planning Coordinator

Email Jason Hatley here

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.

The opinions voiced in

The post Planning With A Purpose appeared first on Fi Plan Partners.

The post Planning With A Purpose appeared first on Fi Plan Partners.

 The Facts This recent market environment has been a strong one, but we wanted to go behind the scenes to really look at the facts and figure out what’s really going on. Right now, there are many stocks that are down this year. In regards to sectors, Airlines are down about 52% year-to-date. Banks […]



The Facts

This recent market environment has been a strong one, but we wanted to go behind the scenes to really look at the facts and figure out what’s really going on. Right now, there are many stocks that are down this year. In regards to sectors, Airlines are down about 52% year-to-date. Banks are down 33% along with energy which is down 32%. Auto is down 30%, consumer finance is down 27%, and utilities are down 5%. With all that being said, we are still seeing strength in the market. There are a lot of positives out there, so we want to take you behind the scenes to see how that impacts your portfolio in relation to all the economic news that’s going on. Is it as good as it seems or is it as bad as it’s going to get? That is one of the questions we’re debating.

Nationwide Issues

Some of the airline stocks started to rally this past Friday while at the same time they were laying people off. With those people being laid off, that’s a consumer that’s not going to be spending money. We saw a great surprise in the economy which added 2.5 million jobs back into the workforce. The expectation was that it would decline by 8 million. Certainly, there’s not an employment analyst on the planet who saw that coming but it was good news in that the market and portfolios were up last week. As investment managers, the Portfolio Team at Fi Plan Partners doesn’t just look at the headlines. We always read and analyze the full report. Looking into the full report of unemployment, we see it could cause some concerns because it’s not all positive. The unemployment rate is still 13.3% and we’re still 19.5 million jobs below where we were before the virus started. One other thing that was interesting about the new job number is that the average hourly earnings went down which indicates that it was the lower-paying jobs that were hired back. From an economic standpoint, it’s great to see people come back to work but from a market standpoint, we would like to see higher paying jobs come back. Higher wages gives people the ability to save their excess earnings and then invest it in the market. While, economically, it’s good to see jobs come back, we really want to start seeing the wages go back up to where they were before this happened. Another point of concern is in the layoffs at the state and local government levels. The government laid off 571,000 jobs and more are expected to come. That’s a nationwide problem because state and local governments are the largest employers in the nation. The reports show that the massive monetary and fiscal stimulus helped the recovery. However, it will be important to see if the quick recovery will cause Congress to do less and hold back on a further stimulus that the market might be anticipating. Also, with the economy slowing down, state and local governments are not going to have the tax revenues that they’ve been used to getting. That alone will play a big part in determining if they’re going to hire more people or have to continue to lay them off.

Permanent vs. Temporary

A lot of the stimulus from the government that we expect to end in July may explain why over 2 million of the 2.5 million jobs that were added back were leisure, hospitality, and temporary jobs with lower wages. We saw, month-over-month, nearly 300,000 additional permanent job losses reported. It’s interesting to see the discrepancy between temporary and permanent. We saw temporary jobs added while the number of permanent job losses increased. This is something that is going to have to come to a head at some point and maybe it’ll happen in July when the stimulus either ends or is extended.

Government Jobs

The Federal Reserve is trying to keep the issues with the jobs at the government level from being a problem. Last Wednesday, they opened a lot more bond-buying across all 50 states. In essence, they said that each state government can choose a munic[...]

How Owner-Managed Businesses Will Lead The COVID-19 Economic Recovery In the financial planning architecture at Fi Plan Partners, we have many clients and friends that are involved in owner-managed businesses. With that being said, we must have an extremely high order of expertise in this area. In this vlog, you will hear from our […]

A Glimmer of Hope

Last week, we talked about how we are watching the rising tensions between the US and China very carefully. Over the weekend, China announced that they were pausing part of the trade deal which is already causing some volatility in the markets. However, we are seeing some good things. The data points we have seen the past 2-3 weeks is showing that the worst might be over. Personal income rose 10.5% which was due largely to the federal stimulus from the government. We also saw that the savings rate rose 33% in April. With income rising, we saw consumption fall, but that could be creating some pent-up demand for the 3rd and 4th quarters and could potentially give us a pop in that area. New home sales reported a slight increase which proves that there is an underlying demand for residential housing. Even though consumer spending was down in April, consumer confidence came up in May. That was refreshing to see reported as we go forward with the economy reopening. Hopefully, we will see an increase in spending. We are not out of the woods yet, but we are starting to see that, based on recent data points, the worst might be behind us.

Consumer Confidence

Mortgage applications have gone up for six consecutive weeks. That proves that the consumer is keeping pace with new home buildings, which was a big area of focus not too long ago. This increase is important from a consumer and interest rate level because people are most likely getting a better interest rate when buying or refinancing their house right now. When our financial planning team here at Fi Plan Partners do Financial Blueprints, they make sure to look at these types of things. These things could have an impact on your plan so the team makes sure to evaluate the current market to see if rates could be better for new home purchases or a refinance and plug it in to see if it could benefit you. The Fed has taken strong action on lowering interest rates and we have had clients make comments on whether we will ever see interest rates this low again. This creates opportunities in peoples’ minds that could benefit individuals in certain situations.

Flexibility

It clear that the data is starting to look better. We have covered the Payroll Protection Program extensively on our vlogs but, this week, we wanted to give you a positive update that came from the House of Representatives. We expect the Senate will approve it this week, but they are looking to pass a bill that will provide major flexibility in the Payroll Protection Program. Originally you had to use at least 75% of the proceeds on keeping your payroll intact but with the changes, they are now dropping that to 60%, which provides more flexibility of what you can do with the money that’s already out there. Also, there was a rule, originally, that on the payroll program, you had to pay that back or justify the loan within an 8-week period and they’re now expanding that to 24 weeks. These changes give a lot more money to a business and allows for more flexibility, which is a positive thing. Through the summer these updates could start to have a major “behind the scenes” impact on the economy.

Oil Production

As people start to go on vacation and get out of the house more, it may be a good idea for people to go ahead and fill their gas tank because we’ve seen gas prices start to come up. We have also seen some calming in the oil markets after a record volatility time period when the oil futures market went negative back in April. We’ve actually seen some calming in that area for the last few weeks, but that may change come this Thursday. OPEC Plus, which includes Russia, is working on having a meeting this Thursday to discuss either extending the cuts in production or possibly eliminating their cuts in production. The US shale production has dropped considerably along with the number of rigs due to recent record lows. The oil market has definitely been hurt by the drop in demand a[...]