We See You

Post-graduation debt can be overwhelming when you’re working hard to build your future. See how we can work together to create a financial plan that addresses your needs and supports your goals.

 

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

 

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 #385 We See You (Limited Series) appeared first on Fi Plan Partners.

The post #385 We See You (Limited Series) appeared first on Fi Plan Partners.

Shipping Trouble

A couple of weeks ago we talked about all the reasons we’re bullish on the economy and the markets. This week we want to talk about our concerns, and one is shipping. The reason we look at shipping is because it’s known as the arterial system of our economy and could be a leading indicator. There are two indicators that we are looking into as far as our concerns go. The first one is a truckload diffusion indicator which fell to its weakest level in 2 ½ years. It fell 29% year-over-year which is a big fall in only one year. A CEO of a large trucking firm in Florida said the shipping is the quietest that it’s been for 20 years. The second indicator that we are keeping an eye on is the case freight index which is used by a lot of analysts as a leading economic indicator. The case freight index fell for the 5th straight month. We’re starting to see trucking indicators go from a potential slowdown to an actual contraction. This is something we looked at 18 months to a year ago and at that point in time, it showed strength. The number of open orders verse the number of available trucks was at record highs then. The economy was really humming along. That was a good indicator for us to assume that the GDP would surprise us on the upside, and it did. We even talked then about the fact there was a shortage of truckers. For every truck that was out there that was around 12 to 15 orders waiting to be shipped. We’re now seeing the reversal of that. People are placing orders 90 to 120 days in advance so that the products can be delivered in time before they’re needed. Data like is why the G20 Summit this week may have a heightened interest. This summit will be between the largest developed economies in the world where all the leaders meet to discuss ways to work together. When there is no global coordination on economic issues things like shipping and trucking comes to a halt. We’ll see what comes of this meeting and hope that it can turn this around. If the talks between the leaders of China and the U.S. go well, we could see shipping and trucking coming back up.

Will The Fed Cut Rates?

The Fed met last week and there’s been talk that they were looking to cut rates, but they didn’t. They did, however, indicate that they will cut rates again if the U.S. economy is slowing down. Why would rates need to be cut? Maybe the Fed was seeing data that is hard to find like the trucking and shipping indicators and caused them to want to pull rates back. The Fed could cut rates up to three times from where they are now to get back into a historic normal zone, so to speak. There’s a lot of room to cut if the U.S. economy does slow down but without indicators like this, it is hard to see.

Safety Net

There was a stress test done on the banks here recently. Last week our top 18 banks, where 70% of the capital to U.S. industry comes from, was found to be in extremely good shape. What we want to remind you of is that the Federal Reserve not only oversee rates like we talked about before, but, another big job they have is to keep the U.S. banking system safe. Since 2008, where there was not much cushion room, the banks have grown to the point, in terms of capital reserve, that they’re doing great. The reason that’s important to your money is if banks were in that good of a shape, they can take more risk with customers and can handle most, if not all, of the lending in the United States to companies that are small and where the employment rate growth is. If they can take more risk, they can keep the economy going. The stress test showed that currently, we could have double digit unemployment and a 50% drop in the stock market and the banks would still be fine. That alone is a great economic backstop that we did not have in 2008.

Rise of Technology

We’re seeing that Silicon Valley it’s alive and well. A magnitude of IPOs (Initial Public Offerings) have come out this year. In fact, on[...]

Taking Control

We understand the challenges that women face. In this video, learn how Fi Plan Partners can deliver financial guidance to help you pursue your goals.

 

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

 

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 #383 Taking Control (Limited Series) appeared first on Fi Plan Partners.

The post #383 Taking Control (Limited Series) appeared first on Fi Plan Partners.

What Will The Fed Do?

The Fed will be meeting this week and what we think will be very important is the verbiage that they use. Will the Fed decide to change the rates or not? Not only will they be making a statement about their interest rate policies, but they will also be making a statement about their opinion of the current U.S. economy. While the market has a one-in-four chance to cut this week during the Wednesday announcement, the next meeting is in July which is not that far down the road. Not a lot in the economy can change in that short of a time period so, if they say they’re going to cut rates, it looks more likely that they will cut rates in July. Does that mean the economy is currently in a bad position when you really look at international issues and make a comparison? On Thursday this week, the bank of Japan and the bank of England will announce their decisions. Currently, our Fed fund rate is been between 2.25%- 2.5%. The bank of England’s current rate is 0.75% and the Bank of Japan’s is -0.1%. Our Fed has a lot of wiggle room to bring rates down a good bit before it catches up with its counterparts overseas. This proves how much stronger our economy is than the overseas markets. The market clearly expects that the Fed will cut rates once, if not twice this year and it is already June so we’re running out of time before years end. Overall, it depends on how they say they will make the changes and why.

The Corn Market

We talked last week about the weather and how it can impact the markets. We also addressed how corn and soybean production in the U.S. has gone down dramatically because of the weather. There are still millions of acres unseeded in a $51 billion corn market. They’re expecting the smallest corn harvest in the last four years. Now, that could have been an even longer record if technology hadn’t evolved to the point where they can grow crops at a quicker pace. The forecast shows more rain coming which could cause even more issues. Corn prices have gone up, but your farmers can’t benefit because they’re not putting crops in the ground. The price hike isn’t from production, it’s from the lack thereof. This is a big deal and the slowdown has rolled over to other individuals such as the truckers that carry the corn as well as people selling equipment and herbicides to the farmers. This has caused a huge ripple effect across the country. Increasing the prices on corn is bad because corn is in a lot of things. Corn is used for feeding animals and in turn the shortage causes beef and pork prices to go up. Corn is now in our fuel so those prices could rise as well. The American Farmer, the corn producer, isn’t getting the benefit of the increase because prices are going up due to the lack of growing and selling corn. This could be bad and cause the Fed to look at this. Can the Fed cut rates in the face of rising inflation? You have a hot summer coming up and if you have an early frost right after, that could throw more of a problem into the mix.

Consumer Impact

The corn issue is going to make things more problematic for the Fed this week because we’ve been living the last year or two on better manufacturing numbers and housing. Those have been a little bad lately though and the consumer went back, last week, to what they did in May and the first couple of quarters of this year. Not only was retail spending up nicely, but it was also broad-based. The spending was spread out over gas stations, electronic stores, restaurants and much more. Now in terms of the Fed cutting rates, the retail side of things have been forgotten. The American consumer reports can be inflationary much like the crops are. When you look at retail sales, it shows that they’re going to have to deal with a lot more than one thing during this Fed meeting. This situation seems a lot like 1995. We’re not looking at a rate cut because the economy is bad but simply just anti[...]

Protecting Those You Love Most

Learn more about financial strategies that can help women protect themselves and their families, should something unfortunate occur. Fi Plan Partners can help build out those strategies in order to protect those you love most.

 

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

 

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 #381 Protecting Those You Love Most (Limited Series) appeared first on Fi Plan Partners.

The post #381 Protecting Those You Love Most (Limited Series) appeared first on Fi Plan Partners.

“Shark Attack” Markets

We have picked this topic because, recently, I was at a gathering and somebody mentioned they were going to the beach. In the process someone said, “I just heard that a girl was swimming and got attacked by a shark and lost her leg” and everybody became very concerned and starting asking questions. Come to find out she was swimming late beyond sunset in the ocean. The point we are making is that the media did not say that she was swimming at dark during a normal shark feeding time. Obviously this is a very tragic event that occurred. However, the news didn’t investigate or look at the details as to what time of day she was swimming and how common this occurrence was. Do you increase your risk swimming at that time? So, the reason we picked this topic is we have “shark attack” like topics going on in the markets and it’s important to drill down on them to look at the details.

Weakness in the Economy?

We’ve got people talking about weakness in the economy, but what’s really going on there? With all the talks surrounding the trade wars and negative global slowdown it’s important that we reach out to our clients and viewers to say what reasons why we’re still bullish, not only on the economy, but the market itself. There are some reasons we are still bullish. Consumer confidence is strong which is important because 70% of our economy being consumer. Inflation is low as well as rates and are possibly going lower. We are at full employment. Housing prices are stable, earnings estimates are stable, and growth is moderating but still positive. Also, central banks around the world have begun to stimulate their economy. So, there’s a lot of good news that we’re not seeing in the media that we should be.

Weather the Storm

We had a lackluster jobs report on Friday as we all saw. The market didn’t react the way we thought it would as it clinched on to trade talks. One big contributor to this jobs number was the extreme weather in the Midwest. So, 8 states along the Mississippi had the longest stretch of flooding since the Great Flood of 1927. That’s a long stretch and caused the slowest pace of grain planting in U.S. history, since we’ve been recording it. The main contributors were corn and soybeans. We look at soybeans dealing with U.S. and China trade deal and it appeared as though we were going to have an oversupply of it the U.S. Now, it appears that we might even have the opposite happen. As these feed costs go up so will grocery bills. This will affect the consumer. We might not see that for a couple or few months but there will be a ripple effect of all of this. We have heard all about Chinese tariffs. It may very well be the bad weather that cause soybean prices to go up. However, these types of weather events don’t occur that often.

Jobs Impact

Let’s discuss how much jobs have been impacted in comparison with all the tariff talks. Initially seeing that figure of 75,000 jobs created Friday you have an immediate negative reaction. When you get a little more into the details you see that 88% of the GDP produced by the United States is in service companies like our own. 12% is government manufacturing retail. Well, guess what? That’s where the tariff hit. So, we’re focusing in on this job issue. That’s only 12% of it. The other 88% was fine. And oh, by the way, the unemployment rate, 3.6%, is still the best in 50 years.

Inverted Yield Curve

Often times you hear about an inverted yield. This occurs when the long end or 10-year rates are lower than the short end or 3-month rates. So, currently the 3-month Treasury bill is at 2.2%. The 10-year Treasury bill is at 2.09%. You heard that correctly. So, to give your money to the government for 3 years you will receive more than if you did for 10 years. That historically points to a recession coming because people feeling risk in the market. However, this time might be a little unique. We co[...]

It Takes a Village

Take steps now to ensure that your investment in your child’s higher education will be a sound investment, as it was for you.

 

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

 

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 #379 It Takes a Village (Limited Series) appeared first on Fi Plan Partners.

The post #379 It Takes a Village (Limited Series) appeared first on Fi Plan Partners.

Consumer Impacts

Why do we talk about the consumer every week? Consumer spending makes up two-thirds of all U.S. economic activity, which is a lot. Personal income increased 0.1% in March and increased 0.5% in April. That’s an additional $27 billion in consumer savings from March to April. How is consumer spending related to consumer savings? In April we saw people spend less money on services which includes things like electricity, gas and other items like retail sales. Job growth and consumer spending in retail sales have been a large lag. We would like to see some money come back into the economy; however, we’re seeing evidence of the noise on tariffs start to show an effect.

Rare Earth Metals

We head into this week with $60 billion worth of Chinese tariffs already in effect. Currently, we have no formal high-level talks on the calendar, but, we do have the talk of Mexican tariffs so there’s still a lot going on with the trade war talk. Another trade war conflict that we’re looking at very carefully is that China mentioned recently that they’re going to stop exporting rare earth materials. If you pick up just about any electronic consumer good, it will most likely have a sticker on it that says it was “Made in China”. Most electronics are made with rare earth metals and here’s why this matter is important to us as Americans. America imports about 80% of rare earth materials from China. Specific metals such as arsenic, gallium, graphite, indium and scandium are 100% sourced from China. The problem with that is that smartphones, electronic vehicles, military gear, TVs, computers, and many other things all have these types of rare earth materials in them. If China says they’re not going to export these out, you will see technology companies and construction materials basically be halted by China. This will be a huge deal and we’re making sure to continually look at this very carefully.

The Shift to Mexico

There have been conversations about the tariffs in China as well as Mexico. It’s safe to say that we are very interdependent in our supply chain with Mexico. If you look at what would change with a tariff increase on the day-to-day, the auto market would likely go up about $1,300 on average, per vehicle. Computer products could also have the potential to go up. Whether it be a hard drive, a computer screen or anything to do with the computer, the tech companies build most of it in Mexico. Not only would there be a change in technology, you would also see an increase in fuel. When you get right down to it, there’s a good bit that comes from south of the border with auto being the primary thing. About $125 billion in auto supply parts come out of Mexico to the U.S each year. The U.S. sells the finish products and then about 15-20% of our auto market goes back to them. There’s a meaningful impact even at 5%. In addition to that, if you combine China and Mexico, that’s where most of our supply comes from. The Chinese tariffs have caused a lot of manufacturers to shift to Mexico. There’s a scare with the manufacturers that they could potentially have to shift out of Mexico and if they’re forced to, there’s a concern that there would be a large increase in price. For example, if you had to bring in the supply from Europe it would be about 40% more than what is paid now for goods out of China and Mexico. Manufacturers are a little concerned because there’s a lot of tariff play in our two major supply countries which comes with uncertainty.

 

Greg Powell, CIMA®

President and CEO

Wealth Consultant

Email Greg Powell here

Bobby Norman, CFP®, AIF®

Senior Vice President

Wealth Consultant

Email Bobby Norman here

Ashley Page, JD, MBA

Senior Vice President

Wealth Consultant

Email Ashley Page here

Adam Vansant

Associate Vice President

Wealth Consultant

Email Adam Vansant here

 

Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial [...]

Goals

Financial planning is about more than just managing money. It’s about setting goals for your future and taking steps to achieve those goals. Fi Plan Partners can help set you on the right path and ensure you stay the course.

 

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

 

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 #377 Goals (Limited Series) appeared first on Fi Plan Partners.

The post #377 Goals (Limited Series) appeared first on Fi Plan Partners.

Thank You

We want to thank those who have previously served in the military, those who are currently serving, and all their families who have made sacrifices for our country. We also want to give a special shout-out to our very own, Felicia Ludlum, and a huge thank you to all who have made the ultimate sacrifice.

History of Recessions

Over the past three weeks the U.S. and Iranian tensions have flared up. We think because of that situation that it’s important to point out what has happened in history in that oil has been the cause of most of the recessions. For instance, a recession started after the Saudi Arabia Oil Embargo in 1973 and 1974. A recession began after the Iranian Revolution of 1979 and again after the Iraq invasion of Kuwait in 1990. We’re watching the Middle East carefully to see if that situation will cause an oil spike.

Retail Sales

Last week we talked about the U.S. consumer and how they think about the overall health of the U.S. economy. One thing that we see lagging right now is retail sales. We think with the consumer sentiment coming out and being positive that we could start to see retail sales begin to drive up. This has also been the biggest contributor in the lag for job growth, so we are hoping that it turns around soon. We are hoping that the spike in oil will not hurt the U.S. consumer and that the consumer will start spending more and retail sales will go up. When you see a big spike in oil, that sucks a lot of oxygen out of consumer spending. People tend to drive less because of the cost of driving and if you’re not driving as much typically, you’re not spending as much. We will see people start to pay more attention to the pumps especially on this Memorial Day holiday weekend. I’m sure everyone has noticed the price at the pump increasing a little bit so how big of an impact will that have on consumer spending? Will we see a pullback if gas prices go up, on retail sales and/or consumer sentiment? This will be the first time we’ve really had a Middle East tension spike in a world where the U.S. is a net exporter of energy. It’s going to be a first-of-its-kind to watch and will be interesting to see how it plays out.

Corporate Confidence

Something that will hopefully help consumer spending is that in the first quarter of this year U.S. corporations paid the highest number of dividends in history. A large amount of $122.5 billion in dividend payments went out to U.S. investors. That’s a hefty 8.3% increase over the last year. This is good on two fronts and the first one being that it’s putting cash back in investors’ pockets. Investors are given the option to either reinvest or spend it. The second is that companies rarely increase dividends if they think things are going to get rocky in the near term because it’s difficult to cut a dividend once it’s increased. It’s a good sign that CFOs and CEOs are confident enough, at least about the intermediate term, that they believe they’ll be able to consistently pay this high of a dividend. Normally companies will do a one-time buyback of stock if they don’t believe in the long-term future. A dividend is something that once it’s set, it’s typically paid in perpetuity. So, again, this payout was a very good sign for U.S. investors.

 

Bobby Norman, CFP®, AIF®

Senior Vice President

Wealth Consultant

Email Bobby Norman here

Trey Booth, CFA®, AIF®

Senior Vice President

Wealth Consultant

Email Trey Booth here

Adam Vansant

Associate Vice President

Wealth Consultant

Email Adam Vansant 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 n[...]