On It with Offit

BY BEN OFFIT, CFP®

MAY JIANG, CPA, CFP® JOINS OFFIT ADVISORS

Offit Advisors is pleased to welcome Tax and Financial Advisor, May Jiang, CPA and CFP® to our growing company.  May is the third additional Advisor we have added to our team in 2019.

Her specialties include tax planning, financial planning, and bookkeeping for business owners and families.  This adds another layer of value that we strive to bring to our clients. 

May has extensive experience, beginning her career as an auditor for one of the "Big Four" accounting firms, serving clients which included Fortune 500 corporations in various industries. She then transitioned to having her own tax planning practice. As a CPA and CFP®, May is passionate about using her knowledge, experience, and leadership to make a difference for her clients. May is an excellent communicator, is empathetic to her client’s needs, and has a sharp business mind.

May graduated Cum Laude with a degree in Finance and Accounting from the Robert H. Smith School of Business at the University of Maryland. She was also an accounting scholar and finance fellow. 

We welcome the opportunity to offer comprehensive tax planning and bookkeeping for your family or business as part of your overall financial plan.

Interesting Tidbits

Picasso famously said “Only put off until tomorrow what you are willing to die having left undone.” He then died without a will. It took his heirs years to reach a settlement with the French government. It takes just a little bit of time to save your loved ones a lot of grief.
 
"Great things in business are never done by one person, they're done by a team of people." - Steve Jobs

"If you don't take care of your money your money won't take care of you." - Mac Duke The Strategist

"There is no dignity quite so impressive, and no one independence quite so important, as living within your means." - Calvin Coolidge

"Goodness is the only investment that never fails." - Henry David Thoreau
 
Every adult should have financial and health care powers of attorney in place, but especially the elderly. 1 in 3 Americans over 85 has Alzheimer’s. Source: The Atlantic

"If you buy things you don't need, soon you will have to sell things you need." - Warren Buffet

62% of millionaires earned a household income of LESS than $100,000 annually. 
Contrary to popular belief, most millionaires are self-made. 79% did not receive ANY inheritance. 
The average millionaire worked 28 years before they hit the mark. 
8 out of 10 millionaires invested in their 401(k). 
73% of millionaires never carried credit card debt.

"We can tell our values by looking at our checkbook stubs." 
- Gloria Steinem

"Money will buy you a fine dog, but only love can make it wag it's tail" - Richard Friedman

According to a study of 10,000 millionaires in the U.S., these are some traits they share:
1. They choose basic investments like ETFs and mutual funds and avoid stock picking as well as fad investments like cryptocurrencies and cannabis stocks.
2. They work with a professional team including a financial planner and accountant.
3. They are growth oriented.
4. They focus on controlling bad financial habits. Source: Chris Hogan

"Obstacles are those things you see when you take your eyes off the goal." - Henry Ford

"Ten years from now you want to be able to say you chose this life, not settled for it." - J.K. Rowling

78% of millionaires started out poor or middle class. You can totally do this.

Market Update

Equity Markets

The S&P 500 pushed through to a new all-time high in October. We have been discussing a similar “wall of worry” for several months that focuses on continued trade uncertainty with China, the path of future Fed rate cuts, some economic uncertainty, and a growing political divide in Washington. Despite those concerns, markets were resilient in October. The fundamentals of the economy continue to show signs of growth and the Fed cut rates for a third time creating conditions that have helped equities grind higher.

Volatility, as measured by the VIX Index, was elevated early in the month (above 20), but it moved steadily lower as October progressed and closed the month in the low teens. We would not rule out higher volatility through year end as several uncertainties remain, but it’s important to note that the market is entering a historically strong period of equity returns.

We have recently discussed a noteworthy change in leadership that occurred in September as value stocks outperformed growth stock and small and mid-cap equities outpaced large-caps. Some of those aspects continued in October as small-caps continued to outperform, but the growth/value differences were more mixed based on the market cap range.

Large-cap growth stocks dominated other categories of equities over the last couple of years, but we have noted in recent months that the value/growth relationship was stretched to historic extremes with the discount that value stocks were trading at compared to the rest of the market. Furthermore, we believed that should this situation revert to more historical norms, value-oriented stocks should benefit. While still too early to call a trend reversal, we have seen some pockets of the market perform better in recent months relative to areas that had dominated for some time.

The numbers for October were as follows: The S&P 500 advanced 2.17%, the Dow Jones Industrial Average gained only 0.59%, the Russell 3000 increased 2.15%, the NASDAQ Composite rose by 3.71% and the Russell 2000 Index, a measure of small-cap companies, improved by 2.63%. Overall, small-caps performed better than large-caps in October. Growth stocks outperformed in the large and small-cap space, but within mid-caps, value outperformed. The Russell 1000 Value Index gained 1.40% compared to the Russell 1000 Growth Index, which advanced 2.82%. We at Clark Capital employ value-oriented measures in our investment process and believe that over a full market cycle, buying quality companies at a good price will be rewarded.

With few exceptions, the U.S. dollar has been strengthening rather steadily since the spring of 2018. This movement culminated in the U.S. dollar hitting its strongest level in late September since the first half of 2017. However, the dollar reversed course in October and weakened, helping international equities advance and outpace the S&P 500 Index.

Emerging market equities, as measured by the MSCI Emerging Markets Index, gained 4.22% in October and the MSCI ACWI ex USA Index, a broad measure of international equities, advanced 3.49% for the month. Those two indices of international stocks still lag their U.S. counterparts year-to-date, but the gap has closed over the last couple of months.

Fixed Income Markets

Despite little movement for the 10-year U.S. Treasury yield during the month, most pockets of fixed income added to already solid gains this year. The closing yield for the 10-year U.S. Treasury for October at 1.69% was only 1 basis point higher than the September close of 1.68%, but that does mask some movement that occurred throughout the course of the month. We continue to believe it will be hard for U.S. rates to move too high with the current amount of global bonds trading at negative yields.

In this environment, fixed income results were as follows: The Bloomberg Barclays U.S. Aggregate Bond Index gained 0.30% for the month, the Bloomberg Barclays U.S. Credit Index advanced 0.57%, the Bloomberg Barclays U.S. Corporate High Yield Index rose by 0.28% and the Bloomberg Barclays U.S. Treasury Index inched higher by 0.07%. TIPS and muni bonds also advanced in October. Most fixed income sectors have shown strong gains through the first 10 months of 2019.

NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes approximately 5,000 stocks, more than most other stock market indices. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indices.

Dow Jones Industrial Average - The Dow Jones Industrial Average is a popular indicator of the stock market based on the average closing prices of 30 active U.S. stocks representative of the overall economy. 

S&P 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. You cannot directly invest in the index.

Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 8% of the total market capitalization of the Russell 3000 Index which includes the 3,000 largest companies in the U.S., based on market capitalization. As of the latest reconstitution, the average market capitalization was approximately $762.8 million; the median market capitalization was approximately $613.5 million. The largest company in the index had an approximate market capitalization of $2.0 billion and a smallest of 218.4 million. 

Russell 1000® Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. 

Russell 1000® Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. 

Government bonds are guaranteed by the U. S. Government and, if held to maturity, offer a fixed rate of return and fixed principal value.

Offit Advisors
28 E Susquehanna Ave
Towson, MD  21286
Phone + Fax:  410 600 PLAN (7526)
E – BOffit@OffitAdvisors.com
W- www.OffitAdvisors.com
 
To schedule an appointment with us, click here!

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.