Wealth Management Insights
May 15,2015
1241 Nilles RoadFairfield, Ohio 45014
(513) 829-8888
www.riksaylorfinancial.com
View of the Week
Double Whammy?!
First, with the stimulus induced bull market now in it's record setting sixth year as of March 10, warning signs should be
flashing on your dashboard. Market volatility is coming back and the stage could be set for a simultaneous stock/bond pullback
unlike anything we've seen prior. It's natural to have these in nature like rain/sunshine to balance things out. But, if they fall
together...
Consider this, that WHEN interest rates go up, bond yields go down (like a teeter totter). When the FED raises interest rates,
how quickly, and at what level will determine the reaction. We are hearing of a "taper-tantrum 2.0" like we saw from the
markets as bond buying by our government with printed money wind down. Short of our economy taking off vs just being "ok,"
stocks cannot be considered at *fair levels today. Consider the CAPE (Cyclically Adjusted Price to Earnings) ratios matching
1929/2007 levels historically. Demographics shows the US needs 46-years-olds as peak consumptive spenders to raise the tide
here and abroad. Our charts estimate that it will be 2020-22 before this happens.*
Second, healthcare spend is becoming a larger part of retirement burden than ever before. According to the 2015 Retirement
Health Care Cost Data Report, a healthy couple retiring at age 65 this year will most likely spend more than $266,000 on
Medicare B (which covers doctor and outpatient services), Part D (prescription drug plans), and Supplemental Medigap
insurance over their lifetimes. When expected dental, vision, and hearing costs plus co-pays are included, it jumps to $395,000.
55-year-old couples can expect $321,000 and $463,800, respectively.
So, what if a pullback occurs as healthcare costs have risen 6.5% from last year's projections...double whammy! The challenge
lies in getting yield and lower risk in today's market conditions. Check out our upcoming class and webinar at bottom of page.
*Source Charles Sizemore 4-12-15
Advisory services offered through Rik Saylor Financial, a Registered Investment Adviser. Securities and advisory services offered through National Planning Corporation (NPC),
Member FINRA/SIPC, and a Registered Investment Adviser. Rik Saylor Financial and NPC are separate and unrelated companies.
The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an
endorsement by NPC. To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be
based on an individual’s goals, time horizon, and tolerance for risk. Investment in stocks will fluctuate with changes in market conditions. Past performance does not guarantee future
results.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more
pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks. Any fixed income security sold or redeemed prior to maturity
may be subject to a substantial gain or loss. NPC#96217
TROUBLE VIEWING? Click Here to view the Promo card on the web
SIGN-UP NOW! Click to become a VoiceAmerica Member for Free!
Straight Talk Clear Decisions
Friday at 10 AM Eastern
May 15, 2015: How to tell if your financial
adviser is really working for you?!
How to tell if your financial adviser is
really working for you?! On this week’s
show we will discuss… 1- What does
their IPS (investment policy statement)
state? 2- Are they fee, commission or
solution based? 3- Peddlers vs. planners
4- DOL (department of labor) ruling and
fiduciary status Tune in this week for
great insight about your current money
manager.
Advisory services offered through Rik
Saylor Financial, a Registered
Investment Adviser. Securities offered
through National Planning Corporation
Tune in
Friday at 10 AM Eastern Time on
VoiceAmerica Business Channel
(NPC), Member FINRA/SIPC. Rik Saylor
Financi
Share This Episode
Connect with VoiceAmerica
Download our mobile apps
News and Views
May 8, 2015
U.S. Economy adds 223,000 Jobs in April, Unemployment Remains at 5.4%…The report for last month was largely in line
with expectations of 228,000 new jobs, but the Bureau of Labor Statistics (BLS) revised the number lower by 39,000 for
February and March.
What it means — After waiting all week to see if last month’s disastrous jobs report was a fluke or the start of a trend, the BLS
handed the market a boring report. Wage growth eased to 0.1% in April and 2.2% for the year. The labor force participation ra te
moved up slightly to 62.8%. The market jumped on the news, which investors took to mean that the Fed won’t be in a hurry to
raise rates.
Before anyone gets excited about returning to job gains above 200,000, we need to revisit our old friend, the birth/death
adjustment. For April, the BLS estimated that small companies not participating in the survey created 213,000 jobs. Backing out
this Fantasyland number, the actual number of net new jobs counted in the monthly survey was just 20,000. This might explain
why wage growth remains weak, up only 0.1% for the month and 2.2% for the year.
U.S. Factory Orders up 2.1%, in line with Expectations…The gains were mostly in the transportation sector (airplanes and
cars). Excluding that category, factory orders were up a modest 0.1%.
What it means — Even though orders barely grew without transportation, at least they were positive. After seven straight
months of negative numbers, this is a win, but it’s a hollow victory. Weak factory orders reflect subdued manufacturing, the
middle class economic engine that can’t seem to kick into high gear. With the energy sector still losing jobs and construction
slowly gaining ground, wage growth should remain stagnant.
Oil Prices Rose Sharply, But Then Fell Back…Round-tripping, oil started the week around $59 per barrel, moved up to $61,
then fell back again.
What it means — Analysts and oil producers alike are asking the same question: “Was that the bottom?” Oil prices are up
almost 50% from their recent lows. The move higher was fast… almost too fast. Yes, inventory was down a bit this week, bu t
not by much. At the same time the pace of the declining rig count in the U.S. moderated, indicating that supply might not drop
as quickly as some expect. With the start of the summer driving season just a few weeks away, any pullback in oil will probab ly
be met with buying pressure as traders try to get in front of the next move up.
Interest Rates are on the Rise, 10-Year U.S. Treasury Reaches 2.18%, up 0.55% in a Month… Volatility returned to the
bond markets as rates around the world bounced. The German 10-year bond recently traded at a mere 0.04%, then soared to
0.71% this week.
What it means — Many market watchers think of the bond markets as leading indicators. If yields are falling without
intervention, then growth is stalling. If yields are rising, then economic prospects appear bright. The problem is that we’ve not
had a market without intervention for over half a decade. It’s hard to gauge how much of any interest rate move is based on
economic growth or contraction, and how much is simply a reaction to expected central bank moves. When the two factors
collide, we get strange moves in interest rates, which are compounded by the fact that the markets are much less liquid than they
used to be. Without clear guidance on monetary policy in the U.S., and European markets dealing with Greece, as well as the
European Central Bank’s QE program, expect more volatility in the weeks and months ahead.
We expect rates to move higher in the near term, but then reverse course and dive again.
Stock Buyback Activity and Authorizations Shoot Higher in April… Birinyi Associates estimated that new stock buyback
programs and actual purchases reached a record $141 billion in April.
What it means — As we’ve discussed in these pages, as well asBoom & Bust and Economy & Markets, stock buybacks are a
major reason for at least the latest stages of the booming equity markets. But there is a dark side. When companies buy back
their own stock, they’re implicitly telling everyone that they don’t see strong enough growth prospects for the company to invest
in their business. This makes the latest record in buyback activity a bit worrisome. Adding to the angst is the fact that Feb ruary,
March, and April of this year are three of the four biggest months on record for buyback activity, and the total for this year
could top $1 trillion.
Euro Zone Producer Prices up 0.2% in March, Down 2.3% for the Year… The slight gain in producer prices in the euro
zone was welcome, but the increase isn’t enough to erase the full year of negative reports.
What it means — Things have been so flat in the euro zone for so long that policy makers consider a 0.2% move a triumph. It’s
not. Growth remains elusive on the continent. With Germany facing a demographic slowdown in the years ahead while the
Southern European countries metaphorically rearrange their financial deck chairs on the Titanic, the problems in the euro zon e
won’t be solved anytime soon. Their equity markets are counting on the ECB to keep the euro tap open for a long time, allowing
stock investors to reap the rewards.
Greece will make its next Payment to the IMF…The Greek Finance Minister stated that his country would make good on the
next payment due to the IMF.
What it means — Another week, another Greek catastrophe almost averted. We say almost because there’s no resolution in
sight of the main issue. Greece can’t pay what it owes. Members of the Troika haven’t agreed to reduce the value of their Gre ek
bonds. In February, the drop-dead date for a new deal was pushed out to June. We expect a lot of fireworks between now and
then, which will bleed into the currency markets and bond markets.
Reserve Bank of Australia (RBA) Cuts Interest Rate to Record low of 2.0%… The RBA is fighting an economic slowdown
caused by shrinking demand from China.
What it means — Unlike in the U.S., most mortgages in Australia are variable-rate loans. A RBA drop in rates means more
money in the pockets of consumers. But Aussie consumers aren’t the problem. The Land Down Under needs Ch inese
consumers, businesses, and governments to ramp up their spending so that more orders flow back to Australian exporters. That’s
probably not in the cards. The economic slowdown in Australia should continue, and will eventually bleed into their red -hot
property market. When that happens, look out below!
Next Week — The week of May 11 is quiet when it comes to economic reports. The euro zone, China, and U.S. all report on
industrial production, and the U.S. will also release retail sales. As June gets closer, the standoff between Greece and its
creditors will grab more headlines.
HS Dent is an economic research company that uses various techniques to study the potential impact of changes in demographic trends on our economy. No one person can
accurately predict market movements. Opinions expressed by HS Dent are for informational purposes only and should not be construed as recommendations or advice. Investment
decisions should be based on tax situation, time horizon, risk tolerance and other individual factors. Investors should analyze their own unique situation and explore their options with
the help of a qualified financial professional prior to carrying out any investment strategy. National Planning Corporation (NPC) does not endorse statements made by HS Dent and is
not to be held responsible for and may not be held liable for the adequacy of the information provided. Harry Dent is not a registered representative of NPC. Securities and advisory
services offered through NPC, member FINRA/SIPC, a Registered Investment Advisor. Rik Saylor Financial, HS Dent, and NPC are separate and unrelated entities.NPC#96179
Weekly Market Recap
Week ended May 8
CREEPING HIGHER: U.S. stock indexes rallied on Friday and finished the week with modest gains overall. Stocks have
climbed in four of the past seven weeks, with little sustained momentum up or down.
BACK ON TRACK: U.S. employers added a total of 223,000 jobs in April, a much better showing than the 85,000 -job
increase recorded in March. The unemployment rate fell to 5.4%, the lowest level since May 2008.
RATE OUTLOOK: The strength of the job gains reported on Friday led some analysts to suggest that the Federal Reserve
faces increasing pressure to begin raising interest rates, perhaps as early as September. The Fed’s next meeting is June 16–17.
Market-moving headlines: week ended May 8
OIL CLIMBS BACK: The price of crude oil rose above $60 a barrel on Tuesday for the first time since December. The price
has risen by more than 30% since mid-March, but remains far below the $100 level of a year ago.
GLOBAL DECLINE: The Dow fell 142 points on Tuesday following sharp declines for European indexes amid concerns
about Greece’s debt standoff with creditors. Stocks in China also tumbled on Tuesday. That decline came in response to
concerns about new Chinese government regulations on trading activity using borrowed cash.
YELLEN’S WARNING: U.S. stocks fell on Wednesday after Federal Reserve Chair Janet Yellen said that she believes U.S.
stock market valuations “generally are quite high.” Yellen discussed market risks in response to a question during a forum on
global finance.
SOFT DOLLAR: The U.S. dollar on Wednesday tumbled to its lowest level in two months versus the euro. Although the dollar
rose sharply last year and early in 2015, it has slipped in recent weeks amid mostly disappointing news about the U.S. econom y.
U.K. ELECTION: In the United Kingdom, the Conservative Party of Prime Minister David Cameron will retain power as a
result of an election on Thursday. The outcome is expected to lead to a voter referendum in 2017 on whether the nation should
remain part of the European Union.
JOB RALLY: The strength of Friday’s jobs report was a catalyst for stocks, and the Dow gained 267 points, its best showing of
the week.
INFLATION PRESSURE: Measures of inflation tracked by the U.S. Federal Reserve and the European Central Bank have
risen to the highest level since December. Declining oil prices helped keep a lid on inflation early this year, but a recent rebound
for oil has increased inflationary pressures.
The week ahead: May 11 - May 15
Monday: No major reports scheduled
Tuesday: Job Openings and Labor Turnover Survey, U.S. Bureau of Labor Statistics; Federal budget report, U.S. Department of
the Treasury
Wednesday: Retail sales, business inventories, U.S. Census Bureau; U.S. import and export price indexes, U.S. Bureau of
Labor Statistics
Thursday: Producer Price Index, U.S. Bureau of Labor Statistics
Friday: Industrial production and capacity utilization, U.S. Federal Reserve; Thomson Reuters/University of Michigan Index of
Consumer Sentiment, preliminary result
Weekly Market Recap & Market-moving Headlines provided bywww.jhinvestments.com. The data provided is for genera information only. It is not intended to provide specific
advice or recommendations for any individual and do not constitute an endorsement by NPC. NPC is not to be held responsible for and may not be held liable for the adequacy of the
information available. Indices are unmanaged measures of market conditions. It is not possible to invest directly into an index. Past performance is not a guarantee of future results.
Securities and advisory services offered through NPC, member FINRA/SIPC, a Registered Investment Advisor. Rik Saylor Financial, John Hancock, and NPC are separate and
unrelated entities.NPC#96172
Quote of the Week
"The more we do, the more we can do."
William Hazlitt
brainyquote
Recipe of the Week
Girl Scout Cookie Tagalong Cake Bars
kevinandamanda.com
Ingredients
1 box yellow cake mix
1 stick butter, softened
1 egg
1 cup chocolate chips
½ cup creamy peanut butter
1 (14 oz) can sweetened condensed milk
10-12 Girl Scout Tagalong cookies, coarsely chopped
Instructions
1. Preheat oven to 350 degrees F. Line a 9×13 inch baking dish with foil and spray generously with nonstick cooking spray.
2. Place cake mix, butter and egg into a large bowl, mix until dough forms. Press dough into the bottom of the prepa red baking
dish. Top with chocolate chips. Stir sweetened condensed milk and peanut butter until well combined and pour over dough. Top
with chopped Tagalong cookies.
3. Bake at 350 for 23-25 minutes. Let cool completely, cut into squares, and serve.
Golf Tip of the Week
Too much tension
It is a natural reaction when you want to hit the ball a long way, to grip the club a fraction tighter than usual. This however, is
counter productive. Too much tension restricts both the length and freedom of your swing and it will prevent you from creating
lag in the downswing. This is the secret move that transforms an effortless swing into raw distance! You need to make sure th at
at address your grip is relaxed. A good tip is to either waggle or hover the club. This will help you stay loose and maximise the
fluidity of the swing.
golf-monthly
Health Tip of the Week
Stanford sleep researchers tell us feeling drowsy while driving is a red flag that brain function is only seconds away from s leep
mode. To be safe while driving, experts suggest stopping to sleep when drowsy. In emergency situations where driving must
continue, stop for caffeine and sleep for 15-30 minutes for caffeine to get into bloodstream to maximize alertness.
healthtip.com
Green Tip of the Week
Now spring is here, it's a great time to combine fun and fashion with a 'swishing' (or clothes swap) party with your friends. Get
some fabulous, free clothes and accessories, without any damage to your bank balance - or the environment
friendsoftheearth
Upcoming Events
Monthly Market Economic Insight
May 2015
Sessions will be held at Rik Saylor Financial (in Clock Tower Place)
1241 Nilles Road Fairfield, OH 45014
How to Improve Risk/Reward
in the Present Market
·
·
·
·
·
·
Employee Sponsored Plans (401K, 403B, Deferred Comp, 457, 401A)
Fees vs Costs
Stimulus and Market Distortion
Global Opportunities and Perils (Central Bank Policy)
CAPE (Cyclically Adjusted Price to Earnings Ratios (at 27.1 comparable to 1929/2007)
Rising Interest Rates and the Bond Market
Tuesday, May 26th at 12:30 PM
or
Thursday, May 28th at 6:00 PM
Social Security Today
* 81 different options for couples, 9 for singles…Which is the best choice for your situation?
* What is the formula?
* Start at 62, 66 or 70…How will this choice affect you?
* How does $0 earning years effect your benefit for life?
* Regardless of what you’ve heard, Social Security cannot legally go broke.
* Are you volunteering to pay taxes on your benefits?!?
*How Social Security and other withdrawal strategies can add to your portfolio longevity.
Tuesday, May 26th at 6:00 PM
or
Thursday, May 28th at 12:30 PM
Call 513.454.1362 to reserve your spot!
Seating is limited.
Light snacks will be provided. Each session will last approximately 60 minutes.
FOR INFORMATION ON RIK SPEAKING TO YOUR CLUBS OR ORGANIZATIONS
PLEASE CONTACT KIM AT 513-454-1362 OR [email protected]
Like us on Facebook:Rik Saylor Financial
Follow me on Twitter:riktirement
Advisory services offered through Rik Saylor Financial, a Registered Investment Adviser. Securities and advisory services offered through
National Planning Corporation (NPC), Member FINRA/SIPC, and a Registered Investment Adviser. Rik Saylor Financial and NPC are separate
and unrelated companies.
513.829.8888
©2011 Rik Saylor Financial. All Rights Reserved.