Category: Newsletter

28 posts categorized as "Newsletter"

The SEIA Report

September 28, 2017 SEIA


In this final 2017 quarterly report we talk about 7 Steps to Strengthen your Information Security & Privacy.
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PCG Newsletter

September 28, 2017 SEIA


It’s hard to believe it’s back to school season already. It’s also hard to believe that it’s been 10 years since the start of the financial crisis that brought about the Great Recession. A decade later, we find ourselves in the nation’s second longest economic recovery and expansion (FYI: the average duration of a bull market is 3.5 years).
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Reflation? Or just a scare…

June 15, 2017 SEIA


The textbooks say that fiscal policy tools are best utilized early in the business cycle, as the boost to stimulus can serve to offset early cycle weakness. But when used later in the business cycle, the boost may accomplish little more than the addition of inflationary pressures as there is little slack in the economy to absorb new stimulus. Now eight years after the recession, given the current economic environment (with unemployment already below the Fed’s long-term target) and the current agenda (focused on tax reform, deregulation and infrastructure spending), many pundits are calling for ever-rising inflation in the years ahead.

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Fact Checking The Stock Market

March 21, 2017 SEIA


Due in no small part to an overwhelming sense of political fatigue, some investors and pundits headed into the New Year with a decidedly bearish outlook. For investors, the one thing that cannot be spun is the raw data.
Since mid-2015, we have been likening our sluggish economy to a plane flying at low altitude (“Flying at Low Altitude”). While the economy is indeed growing (the plane is airborne), it is nevertheless chugging along at a meager rate (low altitude). Therefore, any economic soft patches (turbulence) that occur near the zero GDP line (lower altitude) cause considerably more angst than periodic turbulence that’s experienced when the economy is humming along north of 5% (cruising altitude with no need for seatbelts). The margin for error is simply far smaller at low altitude.

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EMERGING MARKETS; EMERGING OPPORTUNITIES

December 24, 2016 SEIA


It is a famous quote attributed to Christopher Columbus. It is wisdom that too few investors ever take to heart. Consider for a moment that U.S. investors typically allocate about 75% of their equity portfolio to U.S. stocks, yet our economy only accounts for about 22% of global GDP (JPMorgan).
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2016 US PRESIDENTIAL ELECTION: EXPECT THE UNEXPECTED

September 15, 2016 SEIA


The Republican and Democratic conventions have both concluded with the expected nominees prevailing – but not without some controversies along the way. The Republican convention got off to a rocky start including an attempt to “unpledge” Trump delegates, as well as the notable absences of Republican Governor John Kasich and previous nominee Mitt Romney. Ultimately, the convention ended well with the speeches of vice presidential nominee Mike Pence, Trump’s children and presidential nominee, Trump himself being well received by the assembled delegates.
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THE END OF FISCAL AUSTERITY

June 15, 2016 SEIA


Between the never-ending U.S. election coverage and the turmoil in global capital markets to begin the year, there’s a good chance you may have missed a seismic shift that registered barely a blip in the press. For the first time in a half-decade, Congress finally took some positive actions to benefit economic growth.
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FEAR OR FUNDAMENTALS?

March 10, 2016 SEIA


After a frustrating 2015, where most major asset classes either returned less than 1% or lost money outright, investors were welcomed into the new year with the worst first ­week of stock market losses—EVER! Following the 6th worst opening day since 1928, the S&P 500 continued to lose ground, ending the first full week down 6%, with the tech­ heavy NASDAQ down 7.3%. But losses weren’t confined strictly to Large Caps—by mid­day Monday, small cap stocks (Russell 2000) were officially in bear market territory, down more than 20% from their June peak.
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OPPOSITES ATTRACT

December 31, 2015 SEIA


They say opposites attract. In capital markets, perhaps there are no two more opposite asset types than high-quality U.S. Treasuries and energy-related Master Limited Partnerships. One is deemed perhaps the safest asset in the world, while the other lately seems perpetually mired in losses. We focus on them a bit more closely this quarter, as we may be at an inflection point— for both assets.
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JAPAN: PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RETURNS

September 4, 2015 SEIA


Global investors and even Japanese citizens are woefully although understandably under allocated to Japanese stocks. Why? For most of our “investment” lifetimes, the island nation has been a place to avoid, with equities (Nikkei 225) still unable to fully recover from the Japanese bubble that popped 25­years ago. From the 1989 top to the 2009 bottom, Japanese stocks lost 83% of their value. Even despite recent gains, a $1 million Japanese equity investment made in 1989 would be worth $500,000 today compared to $6 million if invested in U.S. stocks (S&P 500).
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GLOBAL EQUITY HORSERACE: AN UPDATE ON EUROPE

June 10, 2015 SEIA


Six years into an economic cycle is bound to bring on some changes. In every bull market, as it matures, consumer sentiment improves. It’s only natural that we should collectively feel better as our stocks gain wealth. However, “happier” investors tend to fuel exuberant over sustained rallies, and eventually greed begins to take hold. As the herd mentality sets in, prices move ever higher—until ultimately valuations become too stretched and the inevitable downslope of the business cycle begins and equity prices correct.
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THE ECONOMICS OF OIL PRICES AND POTENTIAL IMPACT TO YOUR PORTFOLIO

March 17, 2015 SEIA


On June 19th of last year, Crude Oil was trading at $106.83/barrel. A mere seven months later, on January 19th, frenetic trading had brought the price per barrel down to $46.47 (a historical drop of 56%). Yet demand is holding steady and, in fact, projected to increase over the next couple of years. The problem today is not a demand problem but rather a “supply” problem that’s directly attributable to the U.S. Shale Oil revolution. In short, the world is awash in too much oil.
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2014 MID TERM ELECTIONS: A LOT CAN CHANGE IN 6 YEARS

December 31, 2014 SEIA


Six years after the 2008 election, which netted Democrats 60 Senate seats and a super majority (along with the ability to enact broad legislation), the 2014 midterm “Republican wave” changed the balance of power, resulting in the most dominantly Republican Congress since 1929. In the Senate, Republicans picked up at least seven seats giving them a 52-54-seat majority (races are still to be decided in Alaska and Louisiana). In the House, they gained 13 seats to give the party its largest majority since before World War II.
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WHY THE TRADITIONAL ASSET ALLOCATION PLAYBOOK MAY BE OBSOLETE: THE X’S AND O’S OF ALTERNATIVES

September 4, 2014 SEIA


Asset allocation “strategies” have traditionally been limited to determining what percentage of a portfolio should be invested in stocks vs. bonds. Bond yields around the globe are at historical lows. Rates are eventually heading higher, which will lead to interest rate risk for bond holders’ principal. Domestic equities are arguably in the later innings of an all already above average bull market in terms of length and returns. So it is therefore safe to say that “traditional” asset allocation is not what it once was. Consequently, high net worth investors are increasingly turning towards Alternative Investments (“alts”) as a part of their overall long term game plan. With this in mind, let’s break down the game film on alternative investments:
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THE RECIPE FOR A MATURING BULL MARKET

June 30, 2014 SEIA


FEAR: A five-year-old bull market can change people. Not that long ago, we were preaching to anyone who would listen the merits of stocks. But the conversation proved difficult as fear overwhelmed many investors. As recently as February 2011 we said, “Even with our current bull market posting a near 100% gain…history suggests that this bull may still have room to run.”
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2014 Q1 EQUITY MARKET OUTLOOK: “DO THE MATH”

March 30, 2014 SEIA


Analysts can value assets in many ways. For real estate, metrics such as Costper-Square Foot and Capitalization Rates are common. For equities, valuation ratios include Price-to-Cash Flow (P/CF), Price-to-Sales (P/S), Price-to-Book (P/B) and the lengthy Enterprise Value-toEarnings before Interest, Taxes, Depreciation and Amortization (EV/EBITDA).
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THE FEDERAL RESERVE: “MEET THE NEW BOSS, SAME AS THE OLD BOSS.”

December 31, 2013 SEIA


The Federal Reserve (the Fed) was not the original central bank of the United States. In 1791, the then fledgling U.S. government granted the First Bank of the United States a charter to operate as our central bank until 1811 when Congress refused to renew its charter. Five years later, the Second Bank of the United States was established but it again lost its charter in 1836.
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ALL COUNTRY WORLD INDEX (ACWI): A BETTER MOUSETRAP

September 30, 2013 SEIA


A lot can change in six years. For example, in 2007, Apple launched its game-changing mousetrap (the iPhone); but that year also marked the beginning of the financial crisis. In October 2007, U.S. equity markets started to retreat from their recent all-time highs and markets fell into turmoil.
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WHEN SAFE BECOMES RISKY, TIME TO REBALANCE

June 30, 2013 SEIA


Last quarter we suggested that although equity markets were approaching six-year highs, “higher yielding securities will continue to perform.” That prognostication quickly proved true as investors’ constant thirst for yield pushed income-oriented assets northwards as dividend securities (Utilities, Consumer Staples, Pharmaceutical Companies, Telecom, Master Limited Partnerships, etc.) enjoyed a rousing first quarter. But now with the S&P 500 at historic peaks, many are questioning whether the market can continue to advance or to heed the catchy rhyme of “Sell in May and go away.”
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BULL MARKET TURNS 4!

March 31, 2013 SEIA


BULL MARKET REVIEW: In early February, the venerable Dow Jones Industrial Average, with its long and storied past, traded above 14,000 for the first time since October 2007, moving to within 180 points (1.3%) of its all time high. The S&P 500, meanwhile, moved above 1500, to levels last seen in December 2007. With major U.S. equity indices approaching all time highs, it may be a good time to step back and reassess where capital markets could go from here. But before we look ahead, let’s look at where we have been.
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ELECTION 2012: WINNERS AND LOSERS

December 30, 2012 SEIA


One beneficiary of the result will be Federal Reserve chairman Ben Bernanke, who will have the continued support of the President, rather than face Mitt Romney, who announced he would not renew Bernanke’s term. From this perspective, markets can relax as quantitative easing (QE) money printing is set to continue and interest rates should remain low. Other winners include:
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POLITICAL PRIZEFIGHT

September 30, 2012 SEIA


Congress is poised for another showdown on taxes and the budget deficit later this year—and this time, like any memorable heavyweight title bout, it has a name. Fed Chairman Ben Bernanke, leader in monetary policy, coined the year-end fiscal policy decisions as the “The Fiscal Cliff.” While it doesn’t pack the same punch as “The Thrilla-in-Manila,” the stakes are higher.
 
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A MODERN GREEK TRAGEDY 2012: “A Midsummer Dream or Nightmare”

June 30, 2012 SEIA


Europe matters once again—and once again the problems center on Greece. At its core, the European sovereign debt-crisis (ESDC) involves debt ridden countries (Greece) that are no longer able to refinance their own government debts without assistance and loans from a third party (Germany). In exchange for the loans, austerity is promised in order to reduce spending and deficits, however, it’s not working. The defensive posture we outlined here late last year began to take shape in early April as fears over the European-debt crisis began to flare up—again.
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What are some financial opportunities I should look for?

March 30, 2012 SEIA


Every year brings some financial change, and 2012 is no exception. Here are some relevant changes relating to investment, tax and estate planning for this year. Retirement Plans. Annual limits for 401(k), 403(b) and 457 contributions rise slightly to $17,000, and you can contribute an additional $5,500 to these accounts if you are 50 or older this year. IRA contribution levels are unchanged from 2011: The ceiling is $5,000, $6,000 if you will be 50 or older in 2012.
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Year End Review, 2012 Preview

December 31, 2011 SEIA


Twelve months ago the US equity markets wrapped up 2010 with a 15% gain. Small caps and emerging markets fared even better with 20%+ gains. It appeared that Ben Bernanke’s Quantitative Easing programs staved off recession and continued recovery and expansion were in store for 2011. Our year end review highlighted trades in the capital markets that would profit from this ongoing recovery.
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Relative Valuations Amid Economic Uncertainty

September 30, 2011 SEIA


The government recently said that the economy grew at a 1% annual rate in Q2, down from its initial estimate of a 1.3% pace and not much better than Q1’s 0.4% growth rate. With the two most recent quarters posting growth rates below 1%, recession worries have increased as periods of 1% growth or less have preceded nine of the past 11 recessions. Year-over-year GDP now stands at 1.5% which is again below the level at the onset of all the recessions since the first quarterly GDP was calculated — with one exception: The six-month recession in 1980 started in a quarter with lower GDP (1.4%). On only one occasion (Q1 2007) has GDP dropped below 1.5% without a recession starting in same quarter—but in that case the recession began three quarters later in December 2007.
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