July 16, 2020

On it with Offit

BY BEN OFFIT, CFP®

Ben Offit will speak with the Comptroller of Maryland, Peter Franchot, about the Coronavirus Market Update in an event on March 24th in Baltimore – this will be a live broadcast. Please see the flyer and the registration links below.

Eventbrite: https://www.eventbrite.com/e/the-economic-impact-of-the-covid-19-pandemic-in-maryland-tickets-99229394791

Facebook event: https://www.facebook.com/events/527367291129256/

Current Market Thoughts

So what should you do as an investor?

This may be the first COVID-19 crisis filled with uncertainty, but it is not the first market downturn created by uncertainty. In fact, there is only one thing all bear markets have in common: they come with a large dose of uncertainty:

1. With 9/11, many feared the economy would take years to recover.

With the Greek Debt Crisis, many feared it would lead to debt defaults all over the world resulting in a global recession.
When United States treasury bonds were downgraded, many feared it would result in a lack of confidence in the United States and plummet us back into recession.
With Brexit, many feared Great Britain would collapse as a global financial center, driving Europe, and with it the world, into recession.
In all cases, we got through it.
Meanwhile someone who went to cash to “wait things out” got burned, missing the time to get back in (which is nearly impossible to do).
We will not all die. There will be a recovery. When the recovery comes, pent up demand will return, and there will be businesses eager to meet that demand. And the economy, and markets, will do what they always do: march onward. And if you can stay engaged, you are far more likely to march on towards your goals than if you try to time your way through this.
It’s been said that there are two types of soldiers in the Army: those who can shoot at the range and those who can shoot when being shot at. We are the latter. We are prepared for markets like this and so are you. This is why we have a plan. This is why we have a strategy. Not for the easy up markets, but for markets like this one. Now is the time to push through it, however long and painful it may be, and come out on the other side.

I hope this has been helpful in keeping communication ongoing. Please reach out to us with any questions or concerns.

Sources: Peter Mallouk

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.

July 16, 2020

Benjamin Offit

July 16, 2020

Benjamin Offit

On it with Offit

BY BEN OFFIT, CFP®

Interesting Tidbits

New to investing and not happy with your stock market returns thus far? Just stick with it. The market is positive just a little more than half of days. Stretch that out over a year and the odds you’re up are about 75%, over 3 years over 85%, and over 10 years about 96%
- Peter Mallouk

About half of the top-grossing concert tours in North America last year were led by artists who were 60 years old or older. The top three spots were held by artists in their 70’s: The Rolling Stones, Elton John, and Bob Seger. Others included Paul McCartney, Billy Joel, Cher, and Fleetwood Mac.
- The New York Times, January 7, 2020

Someone who saved $10,000 a day since the construction of the Egyptian pyramids would still be 80% less wealthy than the world’s five richest billionaires.
- ProPublica, January 22, 2020

“A lie can travel halfway around the world while the truth is putting on its shoes.
- Mark Twain

In the United States today, there are roughly 76,000 electric vehicle charging stations, compared with 168,000 stations that serve gas.
- MarketPlace, January 9, 2020

The estimates of the coming American job losses due to automation vary wildly, from 10% to 47%. However, technology could also create as many as 50 million new jobs by 2030.
- Axios, December 8, 2020

Baby boomers said they trusted the average American brand 63% of the time and tended not to trust it just 26% of the time. By comparison, Gen Z, those 18 to 22, trust the average American company just 38% of the time and 42% said they tend not to. The single-most trusted brand in America? The U.S. Postal Service.
- Morning Consult, January 15, 2020

“I’m sick of hearing how we celebrities are in some kind of bubble and we don’t understand real life. When I am out in public and people approach me, I’m always interested in what they have to say to my security detail.”
- Pat Sajak

“The truth is always different from what anyone says out loud.”
- Stephen Dunn

The third year of a president’s term tends to be the best, so 2019 was in keeping with that trend. Also, stocks are up 66% of the time in a president’s fourth year.
- CIO.com, November 21, 2019

In emerging markets, roughly 5 people enter the middle class every second.
- Axios, October 13, 2018

“War is God’s way of teaching Americans geography.”
- Ambrose Bierce

Offit Advisors is excited to announce that we are expanding to Columbia, MD in Spring 2020.

Ben Offit was featured in the Money Matters Podcast, discussing how his career started, and how Offit Advisors is building into becoming a 'one-stop-shop" for financial planning . Click here to listen.

Ben Offit was featured in a webinar by the University of Maryland, his alma mater. He discussed how to effectively achieve your financial goals in 2020.Click on the picture above to view.

IMPORTANT UPDATES!

GOAL TRACKER for our Financial Planning Clients
If you are a financial planning client, you may be familiar with the use of the Goal Tracker Planning Tool. We have good news for you as we have made this a digital portal which allows our clients to track what we are working on, what we have completed together, and what we intend to explore in the future. Here is the link for our financial planning clients to register!
https://offitadvisors-sandbox.mxapps.io/login.html

AND

Did you know that if you have a non-retirement investment account, you will need to file a 1099 on your income taxes regarding this account. These tax documents will be mailed to you. Please remember to share this with your CPA!

Market Update

Equity Markets
Equity momentum continued into the New Year with U.S. stocks hitting new all-time highs during the first part of January. Phase one of the trade deal with China was signed mid-month and markets have reacted positively to this lessening of trade tensions. The U.S. Mexico Canada Trade Agreement was also signed at the end of the month. The Trump impeachment proceedings have continued as expected and at the end of January, it appeared that no witnesses would be called in the Senate likely leading to a swift conclusion of this event in early February. The market has been anticipating this outcome for some time (impeachment by the House but no Senate conviction or removal from office) and therefore, the market has not been too sensitive to developments on this front.

Also as expected, the Fed held rates steady at the first FOMC meeting of 2020 in late January. Although the Fed continues to monitor incoming economic data, the hurdle for additional rate moves appears high this year, but the economic slowdown that is unfolding as a result of the coronavirus has increased the odds of a rate cut. The Fed has also been engaging in notable liquidity operations which are scheduled to end this summer.

Large-cap U.S. equities, particularly U.S. large-cap growth companies, led the market once again in January after some other parts of the market had performed well over the prior few months.

The numbers for January were as follows: The S&P 500 was slightly lower, down -0.04%, the Dow Jones Industrial Average was off -0.89%, the Russell 3000 slipped by -0.11%, the NASDAQ Composite rose an impressive 2.03% and the Russell 2000 Index, a measure of small-cap companies, was one of the weaker pockets of the market, down -3.21%. As mentioned, growth stocks outpaced value stocks dramatically for the month.

The large-cap and value focused Russell 1000 Value Index declined -2.15% compared to the Russell 1000 Growth Index, which advanced 2.24%. The difference was equally as dramatic in the small-cap universe, but both value and growth small-cap stocks declined in January, meaning once again that large-caps ruled for the month. Small-cap value stocks, as measured by the Russell 2000 Value Index, declined -5.39%, while the Russell 2000 Growth Index fell -1.10%.

International equities struggled as well kicking off 2020 with both emerging market equities and developed market stocks declining in January. The U.S. dollar strengthened in January, which was another headwind for U.S. investors on their international holdings. Emerging market equities, as measured by the MSCI Emerging Markets Index, fell -4.66% in January. The MSCI ACWI ex USA Index, a broad measure of international equities, declined -2.69% to begin the new year.

Fixed Income Markets
Bonds rallied in January as a flight to quality hit the market amid the coronavirus developments. The yield on the 10-year U.S. Treasury fell to 1.51% by the end of January, after ending 2019 with a yield of 1.92%. Even more dramatic, the yield on the 30-year U.S. Treasury fell below 2% at the end of January, closing the month with a yield of 1.99%. Most pockets of fixed income gained in January, but those more interest-rate sensitive parts of the market such as US Treasuries, were the clear leaders to begin the New Year.

Driven by a declining interest rate environment, the returns in fixed income were as follows: the Bloomberg Barclays U.S. Aggregate Bond Index gained 1.92%, the Bloomberg Barclays U.S. Credit Index advanced 2.34%, the Bloomberg Barclays U.S. Corporate High Yield Index was only fractionally higher, up 0.03% and longer-dated U.S. Treasuries were among the best gainers. For example, the Bloomberg Barclays U.S. 30-year Treasury Index advanced 8.27% in January and the Bloomberg Barclays U.S. Treasury Index gained 2.44% for the month. TIPS and muni bonds both advanced in January as well.
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.

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.

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.

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.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Offit Advisors. is not affiliated with Kestra IS or Kestra AS.

January 20, 2020

Benjamin Offit

January 20, 2020

Benjamin Offit

On it with Offit

BY BEN OFFIT, CFP®

Wishing you the Best of this Holiday Season!

As my family has grown this past year, and as we celebrate this holiday season, we wish you and yours the best of the season. This has been our best year in the business, and it is thanks to you, our loyal clients and friends. Thank you to all, and … — As my family has grown this past year, and as we celebrate this holiday season, we wish you and yours the best of the season. This has been our best year in the business, and it is thanks to you, our loyal clients and friends. Thank you to all, and may you have a joyous holiday season, and a happy, healthy New Year. We look forward to the coming year, and hope to offer more exciting updates in 2020.

Interesting Tidbits "The great thing in this world is not so much where you stand, as in what direction you are moving." - Oliver Wendell Holmes "We cannot become what we want by remaining what we are." - Max Depree Optimists solve problems when t… — **Interesting Tidbits**

"The great thing in this world is not so much where you stand, as in what direction you are moving." - Oliver Wendell Holmes

"We cannot become what we want by remaining what we are." - Max Depree

Optimists solve problems when they arise. Pessimists invent problems before they start.

86% of wealthy people who work full time put in 50 hours or more each week at their career. Source: Thomas Corley, Rich Habits

Feeling threatened by Marxists in the late 1800s, Germany’s leader, Otto Von Bismarck, started forced retirement with a pension at age 65 to create job opportunities for younger, unemployed workers. And we’ve bought into the concept of retiring in our 60s ever since.

"The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind." - T.T. Munger

"Gratitude always comes into play; research shows that people are happier if they are grateful for the positive things in their lives, rather than worrying about what might be missing." - Dan Buettner

"In many ways, the stock market is like the weather in that if you don't like the current conditions all you have to do is wait awhile." - Lou Simpson

67 percent of wealthy people watch less than one hour of television daily, and 63 percent spend less than one hour daily surfing the internet. Source: Thomas Corley, Rich Habits

"The achievements of an organization are the results of the combined effort of each individual." - Vince Lombardi

"Price is what you pay, value is what you get." - Warren Buffett

“Be assured it gives much more pain to the mind to be in debt, than to do without any article we may seem to want.” Thomas Jefferson in a letter to his daughter

Approximately 2 million millennials are living with their parents or rental housing due to student loan debt. Source: JP Morgan

The one thing that has surprised me all my life is how many people with high IQ's do massively stupid things." - Charlie Munger

"When everything seems to be going against you, remember that the airplane takes off against the wind, not with it." - Henry Ford

Contrary to what you're hearing in the general media, there is more hope for those impoverished than ever. In 1970, the world poverty rate was about 27%, and today is at 5%, a decline of 80%. Source NBER

"An investor who has all the answers doesn't even understand all the questions." - John Templeton

Ben Offit, CFP® is featured in Baltimore Magazine as a 2020 Five Star Wealth Manager, for the third consecutive year.To receive the 2020 Five Star Wealth Manager award, researched and managed by Five Star Professional, a wealth manager must meet 10 … — **Ben Offit, CFP® is featured in *Baltimore Magazine* as a 2020 Five Star Wealth Manager, for the third consecutive year.**
To receive the 2020 Five Star Wealth Manager award, researched and managed by Five Star Professional, a wealth manager must meet 10 objective eligibility and evaluation criteria associated with wealth managers who provide quality services to their clients. 1,759 wealth managers in the Baltimore area were considered for the award. 232 were named in 2019. Five Star Wealth Managers which represents less than 13% of the total wealth managers in the area. Wealth managers do not pay a fee to be considered or placed on the final list of 2020 Five Star Wealth Managers. The Five Star award is not indicative of the wealth manager's future performance.

Webinar: New Year, New Financial ResolutionsWednesday, January 8, 2020 - 12:00pm to 1:00pm Host: University of Maryland Alumni Association I am proud to be featured in a webinar hosted by my Alma Mater, University of Maryland. Learn how YOU can set… — **Webinar: New Year, New Financial Resolutions**
Wednesday, January 8, 2020 - 12:00pm to 1:00pm
Host: University of Maryland Alumni Association

I am proud to be featured in a webinar hosted by my Alma Mater, University of Maryland. Learn how YOU can set your course for a successful financial 2020. What can you think about now, and what actions can you take now and through the rest of the year to achieve your financial outcomes? Join us!

https://alumni.umd.edu/Webinar-Financial-Resolutions?utm_medium=social&utm_source=facebook.page&utm_campaign=postfity&utm_content=postfity12d42
Cost: Free to attend
RSVP by 1/8/2020

2019 Year-End Planning Checklist

As year-end approaches, there's still time to make sure you're on track toward your important financial goals, including maximizing retirement savings and taking steps to reduce your tax exposure. Begin by reviewing this year-end financial planning checklist:

1. Adjust your withholding - You can use the IRS's online, interactive Tax Withholding Estimator tool

2. Make employer plan retirement account contributions - there's still time!

3, Use any remaining Flexible Spending Account (FSA) balances - "use it or lose it" rule applies to these workplace spending accounts

4. Make 2019 HSA contributions - HSA's are tax-advantaged medical savings accounts

5. Make charitable contributions - The new tax law increased the limit for charitable donations to 60% of adjusted gross income - but you then must itemize your 2019 return

6. Bunch out-of-pocket medical expenses - With the adjusted gross income floor for medical expenses reverting back to 10% of AGI in 2019, you can prepay certain 2020 expenses in 2019 to bring itemized deductions over the standard

7. Satisfy RMD's - if you're age 70 1/2 and have traditional IRA's be sure to satisfy this requirement to avoid penalties

8. Consider a QCD - if you're age 70 1/2 or over and have money in an IRA-you may be eligible to make a Qualified Charitable Distribution paid directly to a charity - not taxable and counts toward your RMD

9. Harvest tax losses - selling certain positions with unrealized losses can help offset other gains

10. Make year-end gifts - the 2019 annual gift tax exclusion amount, which is $15,000 for individuals and $30,000 for married couples, allows you to make gifts without cutting into your lifetime gift and estate tax exemption.

Meet with your tax and financial advisors regularly, and especially at the end of each year, to review your financial goals and determine if there are any additional steps you can take now to prepare for the year ahead.
Source: Ron Carson, Founder and CEO of Inc. 5000 firm Carson

Market Update

Equity Markets
Markets have been climbing the “wall of worry” for most of the year and November was no exception. Trade uncertainty with China continues to exist and that issue likely links directly with a manufacturing slowdown in the U.S. A growing political divide in Washington continues to expand as the formal impeachment hearings enter a new phase with the House Judiciary Committee.

There was some clarity on the future path of Fed rate activity as Chairman Powell indicated that, after cutting rates for a third time in October, the Fed would likely be on hold for some time, unless economic conditions changed. We have written about these issues for most of the year, yet the market continues to be resilient and climb higher.

Concerns about the pace of U.S economic growth have lingered in the market, with manufacturing and trade issues a key concern. However, the U.S. economy has continued to grow, and the job market has remained strong. Workers have made real wage gains, and consumers have continued to spend as well. In fact, Black Friday online sales were up about 20% from last year. We believe that broader economic fundamentals continue to point toward ongoing economic growth.

In 2019, we have generally seen U.S. large-cap growth companies outpace most other parts of the market. However, we have noted that some other areas of the market have made some headway against this broader trend in recent months. September saw value and small-cap companies with some leadership and international equities outperformed U.S. stocks in recent months as well.

November saw solid returns across the board for U.S. equities with small-caps once again enjoying some market leading gains. International equities were the clear laggard in November and continue to trail U.S. equities year-to-date. However, it is important to have some perspective because although it is true that international equities have lagged U.S. stocks, they are still showing double-digit gains through the first 11 months of the year.

Earlier this year, we were seeing historical extremes in the market when looking at the discount that value stocks were trading at compared to the broader market. In many ways, this was reflecting the strong outperformance of large-cap growth companies over the last couple of years.

We continue to believe that should this growth/value 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.

For example, high yielding sectors like Utilities, Real Estate, Consumer Staples and Energy have struggled the last couple of months. Meanwhile four of the five top performing sectors for the last two months were bottom dividend yielders, which is a significant change in market leadership. As more diverse areas of the market make gains, diversified portfolios should benefit as well.

The numbers for November were as follows: The S&P 500 advanced 3.63%, the Dow Jones Industrial Average gained 4.11%, the Russell 3000 increased 3.80%, the NASDAQ Composite rose an impressive 4.64% and the Russell 2000 Index, a measure of small-cap companies, improved by 4.12%. Growth stocks moved back into a leadership position for November with stronger results compared to value stocks in both the large and small-cap space. For example, the Russell 1000 Value Index gained 3.09% compared to the Russell 1000 Growth Index, which advanced 4.44%. The Russell 2000 Growth Index advanced 5.89%, while the Russell 2000 Value Index rose by less than half that at 2.34%.

The U.S. dollar hit its strongest level in late September since the first half of 2017. The dollar reversed course in October and weakened, which helped international equity results, but that decline paused in November. Overall, the U.S. dollar rose in November creating a headwind to international returns. Emerging market equities, as measured by the MSCI Emerging Markets Index, declined on a dollar basis during the month by -0.14%. The MSCI ACWI ex USA Index, a broad measure of international equities, advanced a modest 0.88% in November. These two indices of international stocks lag their U.S. counterparts year-to-date, but both are up double-digits over the last 11 months.

Fixed Income Markets

Most pockets of fixed income have enjoyed solid year-to-date gains as interest rates have dropped rather dramatically during 2019. However, yields hopped around in November and bond results were mixed as the yield on the 10-year U.S. Treasury ultimately settled higher from the October close. The closing yield for the 10-year U.S. Treasury for October was 1.69% and it closed November at 1.78%

The “risk-on” nature of the stock market rally was reflected in bond returns as well, as credit and high yield bonds performed better than other areas of the fixed income market. We continue to believe it will be hard for U.S. rates to move too high with the current amount of global bonds with negative yields. Furthermore, we maintain our long-standing position of favoring credit versus rate exposure in this environment.

With this backdrop, fixed income results were mixed and were as follows: The Bloomberg Barclays U.S. Aggregate Bond Index was off -0.05% for the month, the Bloomberg Barclays U.S. Credit Index advanced 0.19%, the Bloomberg Barclays U.S. Corporate High Yield Index rose by 0.33% and U.S. Treasuries were generally down. TIPS and muni bonds both advanced in November.
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.

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.

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.

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.

January 20, 2020

Benjamin Offit

On it With Offit Newsletter

January 20, 2020

Benjamin Offit

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.

Our 10 Year Anniversary Event this October was a well-attended and fun event. Our clients and friends enjoyed music, food and friendship. Thank you to all who came out to be with us as we celebrated. We are looking forward to our next ten years!

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.

September 7, 2019

Benjamin Offit

On It with Offit Newsletter

September 7, 2019

Benjamin Offit

On It with Offit

BY BEN OFFIT, CFP®

nteresting Tidbits

"If your ship doesn't come in, swim out to meet it!"
- Jonathan Winters

Over the last 40 years, when the U.S. yield curve inverted, the market was up 66% of the time 1 year later and 33% of the time 3 years later. Globally, the market is up 86% of the time 1 year later and 71% of the time 3 years later.
-Source: DFA

"It is our choices, that show what we truly are, far more than our abilities."
- J.K Rowling

"Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do."
- Mark Twain

"Courage is being scared to death, but saddling up anyway."
- John Wayne

"A successful man is one who can lay a firm foundation with the bricks others have thrown at him."
- David Brinkley

Over the last 50 years, the U.S. has been in expansion over 85% of months and been in recession under 15%. More money has been lost than made betting on avoiding these brief pullbacks.
-Source: NBER

"We make a living by what we get, but we make a life by what we give."
- Winston Churchill

"Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give."
- William A. Ward

Four decades ago, the average time you had to escape a house fire, from the moment your smoke alarm went off, was 17 minutes. Today, it’s three minutes or less. Despite fire codes and building regulations, modern homes just burn faster.
-Curiosity

On average, consumers buy 60% more clothing today than they did 15 years ago but keep the items half as long. Nearly 60% of the more than 100 billion garments produced annually end up in incinerators or landfills.-The Wall Street Journal

The typical American eats the equivalent of about 50 chickens or half a cow every year.
-The Week

“A man who has never gone to school may steal from a freight car; but if he has a university education, he may steal the whole railroad.”
-Theodore Roosevelt

My wife and I are thankful to welcome our son, Reed Gordon Offit, to our beautiful world on August 21st, at 11:30 PM. Reed was born at Mercy Medical Center in Baltimore and my wife is the strongest person I know mentally and physically!

We are happy to celebrate 10 years in business on Thursday, October 3rd, 2019! We will have a celebration from 5-7 PM at the Maple Lawn Community Center in Fulton, MD with drinks, heavy hors d'oeuvres, and live music from Chris Diller. To RSVP, click the image above!

Financial Planning Tips - Can I claim from the Equifax breach?

Was your data compromised from the Equifax breach in the past couple of years? If yes, you may be able to claim some money as part of a class action lawsuit. To see if you are eligible, click here.

Market Update

The volatility that equity markets experienced in August really kicked-off in late July when stock market highs, trade concerns and Fed uncertainty collided. The S&P 500 Index achieved a new all-time high in July and broke above the 3,000 level for the first time in its history, but suffered a rather large sell-off following the July FOMC meeting.

Investors were not pleased to hear Fed Chairman Powell’s characterization of the rate cut as more of a mid-cycle adjustment versus a new loosening cycle, and President Trump announced new tariffs on China soon afterwards. Fed policy uncertainty and trade concerns were front and center during most of August and led to some significant swings in the market. Volatility, as measured by the VIX Index, hit its highest levels in August since early January as equities had a hard time finding their footing during the month. As August concluded, trade issues remained unresolved and the meeting of central bankers in Jackson Hole, Wyoming led to another volley of tweets by the President pressuring the Fed to cut rates.

To say the markets will watch closely the lead up to and conclusion of the FOMC meeting on September 17-18 is an understatement. Additionally, progress and/or setbacks on the trade front with China will preoccupy the market until some clarity is achieved on this matter.

The ongoing theme of large-cap growth stocks outperforming other equities continued in August despite stock market declines across the board. Small and mid-cap stocks underperformed their large-cap counterparts, growth outperformed value and U.S. equities outpaced international stocks. The value/growth relationship continues to be stretched to historic extremes and should the current situation revert to more historical norms, value-oriented stocks should benefit.

The numbers for August were as follows: The S&P 500 declined – 1.58%, the Dow Jones Industrial Average fell – 1.32%, the NASDAQ Composite dropped – 2.46%, and the Russell 2000 Index, a measure of small-cap companies, lost – 4.94%. Large-cap value stocks, as measured by the Russell 1000 Value Index, lagged their growth counterparts once again in August declining – 2.94% compared to large-cap growth stocks, as measured by the Russell 1000 Growth Index, which fell only – 0.77%.

International equities continued to feel the brunt of U.S. dollar strength and declined during August. In fact, the U.S. dollar index continued to rise and put in its highest mark since 2017. Sluggish international economies also contributed to global stock market weakness. With this backdrop, emerging market equities, as measured by the MSCI Emerging Markets Index, fell by – 4.88% in August and the MSCI ACWI ex USA Index, a broad measure of international equities, declined – 3.09% for the month. International stocks are positive year-to-date, but in general, their gains have been well below the returns of U.S. stocks.

Fixed Income Market

The headline story in August (in a month of many headline stories) was the dramatic drop in U.S. Treasury yields. By the end of August, all points along the Treasury yield curve were below the Fed Funds target rate. The 10-year U.S. Treasury yield approached lows last seen in July 2012 and July 2016 below 1.5%. The 30-year U.S. Treasury yield dropped below 2.0% during the month, its lowest point on record.

The amount of global bonds with negative yields continued to increase in August with the count well above $15 trillion. The yield on the 10-year U.S. Treasury ended July at 2.02%, but plunged to close August at 1.50%. Even more dramatic, the yield on the 30-year U.S. Treasury closed August at 1.96% after closing July at 2.53%. During a month of sharply declining yields, bond prices rallied.

The yield curve inversion now exists throughout the curve when comparing yields to the Fed Funds target rate. We acknowledge that an inverted yield curve has been a historically negative signal for the direction of the U.S. economy. At the same time, other economic readings that tend to be on the front end of the economy, like the leading economic indicators index and job market data, are not showing the same cautionary signals. We continue to monitor developments in this area closely but expect ongoing economic growth through 2019 and into 2020.

The Fed is trying to engineer a challenging balancing act by supporting economic growth, but at the same time, not cutting rates too much too soon. Market forces are already lowering rates on their own when one looks across most points on the yield curve. Negative global yields, declining rates in the U.S. and continued pressure from the Trump administration to cut rates only complicates the job of the Federal Reserve as we move toward the September FOMC meeting.

In this environment, fixed income results were as follows: The Bloomberg Barclays U.S. Aggregate Bond Index was up 2.59% for the month, the Bloomberg Barclays U.S. Credit Index gained 3.13%, the Bloomberg Barclays U.S. Corporate High Yield Index inched higher by 0.40% and the Bloomberg Barclays U.S. Treasury Index gained 3.40%. TIPS showed gains for the month and muni bonds also advanced in August. One of the most interest rate sensitive fixed income categories is long maturity U.S. Treasury bonds and, reflecting this sensitivity, the index measuring 30-year U.S. Treasury performance gained 12.53% for the month alone.

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.

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.

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.

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.

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.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. OffitAdvisors. is not affiliated with Kestra IS or Kestra AS.

September 7, 2019

Benjamin Offit

On It with Offit Newsletter

September 7, 2019

Benjamin Offit

On It with Offit

BY BEN OFFIT, CFP®

Interesting Tidbits
You’re not ready to be a successful stock market investor if you are nervous when the market is up and scared when it’s down.
-Peter Lynch

I'm a great believer in luck, and I find the harder I work the more I have of it.
-Thomas Jefferson

Innovation distinguishes between a leader and a follower.
-Steve Jobs

My favorite things in life don't cost any money. It's really clear that the most precious resource we all have is time.
- Steve Jobs

Half of the net worth created across the entire US stock market since 1926 comes from just 90 companies. The best way to make sure you participate in the next 90 is to own a diversified portfolio.
-Source: Hendrix Bessembinder/Arizona State

It's good to have money and the things that money can buy, but it's good, too, to check up once in a while and make sure that you haven't lost the things that money can't buy.
- George Lorimer

That man is richest whose pleasures are cheapest.
- Henry David Thoreau

Las Vegas is the only place I know where money really talks - It says, "Goodbye.
- Frank Sinatra

He who loses money, loses much; He who loses a friend, loses much more; He who loses faith, loses all.
- Eleanor Roosevelt

It's not the employer who pays the wages. Employers only handle the money. It's the customer who pays the wages.
- Henry Ford

Wealth is not about having a lot of money; it's about having a lot of options.
- Chris Rock

Both poverty and riches are the offspring of thought.
- Napoleon Hill, American Author

The top 3% of taxpayers make about 29% of all adjusted gross income and pay just over 50% of all income taxes.
-Source: IRS

Formal education will make you a living; self-education will make you a fortune.
- Jim Rohn

Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.
- Johann Wolfgang von Goethe

While pundits are trying to figure out the timing of the next recession, it doesn’t hurt to be aware that the stock market actually posts positive returns through recessions! While the average isn’t great at just 3%, returns are both positive and higher than current bond yields.
-Source: New York Times

Wealth consists not in having great possessions, but in having few wants.
- Epictetus

Offit Advisors is pleased to welcome Financial + Student Loan Advisor, Jamie Callighan, to our growing company. We believe that student loans are one of the most paramount financial planning issues facing our society today. For years we have been … — Offit Advisors is pleased to welcome Financial + Student Loan Advisor, Jamie Callighan, to our growing company.

We believe that student loans are one of the most paramount financial planning issues facing our society today.

For years we have been offering our Financial Planning clients student loan advice, including Public Service Loan Forgiveness, Income-Based Repayment options, and refinancing suitability analysis. Now we have taken that a step further with Jamie. By directly offering Jamie's expertise to our Financial Planning clients, and stand-alone consultations for Physicians, Dentists, Lawyers, Graduate Students, and anyone with student loan debt, we can help them pay down their debt as efficiently as possible.

Jamie has extensive experience in managing student loan debt and other debt repayment strategies. In addition to debt matters, she also has experience in college savings, retirement, and estate planning.

Jamie graduated from Metropolitan State College of Denver with a degree in Behavioral Sciences and holds Series 63 (Uniform Securities Agent State Law Exam) , Series 65 (Uniform Investment Adviser Law Exam) , Series 7 (General Securities Representative) registrations, as well as Life, Accident & Health Insurance licenses.

We welcome the opportunity to review this niche subject matter as part of your overall financial plan to make sure you have the best strategy possible.

Financial Planning Tips - Can I afford to buy Starbucks coffee?

The personal finance space has no shortage of tips to managing your spending, from bag lunches in lieu of eating out at work to home-brewed coffee instead of the morning Starbucks routine. Yet the truth is, we dig ourselves a tremendous spending hole because of our big purchases, and then worry about the small stuff trying to make up the difference. If you really want to change your financial reality for the better, though, it’s the big stuff you really need to focus on – where you live, and what you drive.

If we add up all of the Housing categories and sub-categories, and add Transportation on top of it, we come to a whopping 63% of the household’s total annual expenditures. Entertainment? Only 5.5%. Clothing and apparel? 3.5%. Food at least is almost 13%, although we can still only trim so much, since we do still have to eat a few times every day.

In real terms – we buy the most expensive house and car we can afford, and then drive ourselves crazy clipping coupons to make up the difference. Perhaps the better conversation is about owning more affordable houses, and driving less expensive (or dare I say it, USED!?) cars.

Choosing an apartment that’s $500/month less expensive or a smaller house that has $500/month in mortgage costs, similarly, saves so much money on “the big stuff” that many wouldn’t have to sweat the small stuff at all anymore. And sadly, the more affluent the individual, the more that significant housing and automobile costs consume huge portions of the annual income!

Unfortunately, these are difficult conversations to have. Many people view their nice homes and their nicer cars (1, 2, or even 3+ of them) as entitlements that we “should” get the moment a lender will approve us to finance them. But the reality, as the research shows, is that maxing out your capacity to borrow might not lead to a default, but it certainly does crowd out our ability to spend money on the experiences that ultimately bring us more happiness.

As long as there’s a secure roof over your head, and you have an automobile that’s capable of getting you to work and the kids where they need to go – even if that car isn’t as fancy as you hoped, or the house isn’t as big as it might have been – life will go on. And you might even enjoy it more. - Source: Kitces.com

Market Update

Equity Markets

The S&P 500 Index achieved a new all-time high in July and broke above the 3,000 level for the first time in its history. The momentum from June continued in July as the market’s recovery from the May sell-off, which was triggered by a negative turn in the China trade negotiations, kept going. Although trade issues remained unresolved, they were trumped by rising expectations of a more accommodative Fed and a likely rate cut in July, which indeed occurred.

Most major U.S. equity indices gained in July, but international stocks could not overcome U.S. dollar strength and declined during the month. It is worth noting that although U.S. equity indices posted gains for the month, a portion of those gains were lost on July 31 following the FOMC meeting as equities sold off sharply to close out the day.

The numbers for July were as follows: The S&P 500 gained 1.44%, the Dow Jones Industrial Average (DJIA) rose by 1.12%, the NASDAQ Composite advanced 2.15%, and the Russell 2000 Index, a measure of small-cap companies, edged higher by 0.58%. Large-cap value stocks, as measured by the Russell 1000 Value Index, lagged their growth counterparts once again in July with an advance of 0.83%.

Comparatively, large-cap growth stocks, as measured by the Russell 1000 Growth Index, advanced 2.26%. Although this continues to be a challenging period for managers using value characteristics, we believe the value/growth relationship continues to become more and more stretched and over the long-term, value companies will be rewarded once again.

International equities slipped lower in July. Despite the anticipated and ultimate rate cut by the Fed during the month, the rest of the world remains more accommodative than the U.S. on a relative basis and the U.S. dollar rallied. In fact, the U.S. dollar index rose to its highest level in more than two years in July. With this backdrop, emerging market equities, as measured by the MSCI Emerging Markets Index, fell by -1.22% in July and the MSCI ACWI ex USA Index, a broad measure of international equities, declined -1.21% for the month. Year-to-date returns have still been solid for international stocks, but in general, they have not been able to keep pace with U.S. equities so far this year.

Fixed Income Markets

The 10-year U.S. Treasury yield has dropped dramatically so far in 2019. The yield ended June at 2.0%, and early in the month (July 2nd and 3rd), it closed below the 2% mark for the first time since 2016. Although it bounced up from those lows as the month progressed, it slid lower later on in the month and ended July at 2.02%. (Quick update: Following the FOMC meeting on July 31st, the 10-year U.S. Treasury yield dropped dramatically below the 2% mark at the beginning of August.)

The Fed is trying to engineer a challenging balancing act by supporting economic growth but at the same time, not cutting rates too much too soon. Markets will continue to monitor any information from the Fed closely as investors try to figure out the pending course of Fed action. The situation seems to be complicated by ongoing pressure from the Trump administration to cut rates, which should, by definition, not be a consideration as the independent Fed determines policy action.

The yield-curve inversion (comparing the 10-year U.S. Treasury and 3-month T-bill yields) shallowed in July and had a brief day back in a positive position. However, the yield curve inversion resumed from that point and ended the month back in inverted territory. History shows us that the length of the inversion matters, and the yield curve has been in that position for the most part since late May.

We acknowledge that an inverted yield curve has historically been a negative signal for the direction of the U.S. economy. At the same time, other economic readings that tend to be on the front end of the economy, like the leading economic indicators index and job market data, are not showing the same cautionary signals. We continue to monitor developments in this area closely, but we believe economic growth will continue through 2019 and into 2020.

In this environment, fixed income results were as follows: The Bloomberg Barclays U.S. Aggregate Bond Index was up 0.22% for the month, the Bloomberg Barclays U.S. Credit Index gained 0.52%, the Bloomberg Barclays U.S. Corporate High Yield Index advanced by 0.56% and the Bloomberg Barclays U.S. Treasury Index fell by -0.12%. TIPS showed gains for the month and muni bonds were among the best performers in the fixed income space in July.

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.

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.

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.

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.

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.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. OffitAdvisors. is not affiliated with Kestra IS or Kestra AS.

September 7, 2019

Benjamin Offit

On it with Offit Newsletter

September 7, 2019

Benjamin Offit

On it With Offit

BY BEN OFFIT, CFP®

Interesting Tidbits
People who say they value money highly say they are less happy in life than those who care more about love and friends.
-Source: Kahneman, Krueger

“In times like these it helps to recall there have always been times like these.”
-Paul Harvey

Surprisingly good news: debt service payments as a percentage of disposable income are at 40 year lows, at just 10%.
-Source: St. Louis Fed

The weakest dog usually barks the loudest.
-Norman Reedus

There’s been a lot of press about the wealthiest U.S. citizens. Who are they?
Net worth of the Top:
10% is $1.2 million and up,
1% is $10.3 million and up,
.1 is $43 million and up.
-Source: Forbes

The real measure of our wealth is how much we'd be worth if we lost all our money.
-Jowett

And in the end the love you take is equal to the love you make.
-The Beatles

Those recessions we are all so worried about? Well they last, on average, less than a year. For perspective, the average expansion lasts over 5.5 years.
-Source: Economic Policy Institute

What you teach your children, you also teach their children.
Source: Unknown

There are three kinds of people in this world. Those who see, those who see when they are shown and those who will never see.
-Da Vinci

Talent hits a target no one else can hit. Genius hits a target no one else can see.
-Arthur Shoepenhaur

A business that makes nothing but money is a poor business.
- Henry Ford

It's how you deal with failure that determines how you achieve success"
- David Feherty

In June I had the opportunity to go to Los Angeles and spend some quality time with some dear friends of mine that I known my entire life. As time goes on, friends and family may disperse geographically, but the ones who truly matter and care about you will always be nearby.

Financial Planning Tips

In March of 2019, I had the opportunity to present on Elder Abuse to the Society of Daily Money Managers in Rockville, MD.

Have you known someone who may have been a victim of elder financial abuse?

It is when someone takes advantage of an elder persons’ financial resources for their own personal gain or benefit.

This is predominantly perpetrated by those who are closest to the elder person ie. family members, caretakers, and "trusted" people who target their wealth. Most abuse occurs from people not associated with the money management industry.

Unfortunately, only 1 in 5 cases are reported and the victims are 3x more likely to pass away, experience depression, guilt, and anger and to isolate themselves. This also has an estimated $30B cost to society.

Warning signs of this can include sudden changes to their financial accounts, confusion about financial affairs, new "trusted" caretakers and best friends, and new romantic relationships that don't pass the smell test.

If you believe someone you know may be a victim of this issue, get in touch with an elder law attorney or a Fiduciary-oriented financial planner.

As always, if you have any questions, don't hesitate to reach out to us at 410-600-PLAN.

Financial Planning Tips

Equity Market

Coming off a tough month in May, equities showed great resilience in June and rallied sharply to close out the quarter. Trade concerns with China dominated headlines in May, and while no final resolution was made on that front, the market’s focus seemed to turn to the Fed in June. Markets have become more and more convinced that a rate cut cycle is rapidly approaching and under that context, interest rates fell and stocks rallied to close out the first half of 2019.

Although all major equity indices enjoyed a strong first six months of 2019, the theme of large-cap growth stocks outperforming everything else continued in the second quarter and year-to-date. However, large-cap value stocks enjoyed modestly better gains than large-cap growth in June. Other recent trends of large-cap stocks outperforming small-caps and U.S. stocks outperforming international equities continued to hold as well.

The value/growth relationship has stretched to historic extremes and should the current situation revert to more historical norms, value-oriented stocks should benefit. At Clark Capital, we employ value-oriented measures in our investment process and believe that over a full market cycle, these value characteristics will be rewarded.

The numbers for June were as follows: The S&P 500 advanced 7.05%, the Dow Jones Industrial Average (DJIA) rose by 7.31%, the NASDAQ Composite gained 7.51%, and the Russell 2000 Index, a measure of small-cap companies, was up 7.07%. These strong gains pushed Q2 returns into positive territory after sharp declines in May as these major equity indices advanced 4.30%, 3.21%, 3.87%, and 2.10%, respectively, for the quarter.

Large-cap value stocks, as measured by the Russell 1000 Value Index, gained 7.18% in June while large-cap growth stocks, as measured by the Russell 1000 Growth Index, advanced 6.87%. Although value outperformed in June, the quarter still saw growth outperform as those two indices gained 3.84% and 4.64%, respectively.

International equity results were also strong in June. The U.S. dollar weakened during the month due in part to expectations mounting of a likely rate cut by the Fed. We continue to believe that the headwinds faced by international equities in 2018, driven in large part by U.S. dollar strength, will be less intense in 2019 as the Fed has clearly turned more dovish in 2019 compared to a more hawkish stance in 2018.

With this backdrop, emerging market equities, as measured by the MSCI Emerging Markets Index, gained 6.24% in June and the MSCI ACWI ex USA Index, a broad measure of international equities, gained 6.02% for the month. For the second quarter, those two indices advanced 0.61% and 2.98%, respectively. International stocks have enjoyed solid gains over the first half of 2019, but have not been able to match the tremendous results of U.S. equities so far this year.

Fixed Income Markets

The 10-year U.S. Treasury yield has dropped dramatically over the last few months and closed June at 2.0%—its lowest closing level since the fall of 2016. Mounting expectations of a Fed rate cut, persistent low inflation and negative global interest rates have contributed to this recent decline in yields.

The short-lived yield curve inversion at the end of March (comparing 10-year U.S. Treasury and 3-month T-bill yields) resurfaced in late May and the yield curve stayed inverted for all of June. The length of time the yield curve stays inverted has mattered historically, and we continue to monitor this data closely.

We acknowledge that an inverted yield curve has been a historically negative signal for the direction of the U.S. economy; however, at the same time, other economic data that tends to be on the front end of the economy, like the Leading Economic Indicator Index and job market data, are not showing the same cautionary signals.

In this environment, fixed income advanced across the board in June. The Bloomberg Barclays U.S. Aggregate Bond Index was up 1.26% for the month, the Bloomberg Barclays U.S. Credit Index gained 2.26%, the Bloomberg Barclays U.S. Corporate High Yield Index advanced by 2.28% and the Bloomberg Barclays U.S. 30-Year Treasury Index rose 1.37%.

For the second quarter, these indices gained 3.08%, 4.27%, 2.50% and 6.76%, respectively. Longer-dated U.S. Treasuries, among the most sensitive bonds to interest rate movements, have clearly benefited from the significant drop in yields in 2019. TIPS and muni bonds gained in June and are positive for the quarter and year-to-date as well.

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.

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.

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.

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.

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.