By: Lisa Thuer - Senior Trading and Research Specialist
We are a week away from a historical Presidential Election. A new twist seems to take place on a daily basis in both camps of Clinton and Trump. Unfortunately the market does not like the uncertainty that is taking place. These volatile times make investing in the near term a very difficult time to deal with the volatility and the fear of the unknown. Each candidate has their own agenda. How much they will be able to get done in Washington also depends on if we remain a balanced government with Congress or if it will be one-sided. Approaching Election Day, we thought it would be clear as to which direction the markets will be heading. However, everyday there seems to be a new headline leading to more uncertainty.
Healthcare has been a drag on our portfolios this year. It is one sector that had been hit hard at the beginning of the year and was not able to bounce back as other sectors did. The healthcare sector is filled with innovation and advancements allowing people to live longer and cures for cancer and other diseases to name a couple. Baby boomers and our aging population are all benefiting from the advancements taking place in this sector. Unfortunately, the elections are wreaking havoc in this area and the regulations that may be implemented are unknown. We have made a decision to reduce the risk going into the Election next week by taking healthcare off the table. Pharmaceuticals and Biotechnology will continue to be volatile in the coming months. We still believe this is an area of growth in the future; however we will sit on the sidelines and wait for all the regulatory issues to fall in place.
The rest of our portfolio will remain invested in the current asset allocation of stocks, bonds and alternatives and we will not make any further changes until after the Election. Even with the volatility that will take place in the coming days and weeks, it is built to weather the storm. The talk has been swarming that there will be a tax repatriation holiday where multinational companies will be able to bring back foreign profits to the U.S. at a favorable tax rate. This would benefit the U.S. and us as investors by encouraging the corporations to spend and create jobs along with a possible one-time special dividend to shareholders. Therefore we are willing to be patient in the remainder of our portfolio and do not want to be out of the markets when this does take place.
In the meantime, we appreciate your confidence and support through these difficult market times. Should you have any questions, please feel free to contact one our KFA team members.
By: Jacqueline Whitaker - Business Manager
Cybersecurity can be a scary topic!
There are specters haunting cyberspace in pursuit of your Personally Identifiable Information (PII). They can curse you by stealing your identity, tarnishing your reputation, and creeping into your bank accounts.
Personally identifiable information (PII), or sensitive personal information (SPI), as used in US privacy law and information security, is information that can be used on its own or with other information to identify, contact or locate a single persons, or to identify an individual in context. KFA is sober minded when it comes to shielding our clients PPI. We have procedures in place to help us recognize the ghostly shadows of cybercriminals. Clients partnering with us in our culture of protection provide the best defense against fraudsters.
Click HERE to view a flyer that will provide more detail on how you can protect your PII and your money. Fortunately, there are simple steps you can take to thwart the actions of the ghouls and goblins who seek to entangle you in their dark web.
By: Lisa Thuer - Senior Trading and Research Specialist
The fourth quarter is upon us and where do we go from here. 2016 started out with one of the most volatile Januaries in history only to be led by an upward climb in February and March. June ended with the whipsaw of Brexit. Not to mention the Federal Reserve indecision of raising interest rates or not. If all of that isn’t enough, let us bring an unconventional Presidential Election into the mix.
Putting all of the noise aside, the economy is growing. Perhaps not at leaps and bounds, but it is growing and slow growth keeps inflation intact. The unemployment rate is low and wages are rising, slowly. Home and auto sales are good. Consumer confidence is up which is a positive sign that people feel things are improving. Oil has come off its lows and the dollar has come off its highs giving both of them some stability.
How does all this relate to your portfolios? Our job becomes challenging at times when the markets do not trade on fundamentals. In the long run, fundamentals do win out. However, short-term it makes it quite difficult to tune out the noise and look to the long-term goals and know that your timeline may be extended to reach these goals. Depending on your age, this timeline may be shorter or longer for each individual. Emotions do get in the way of money and investing, however this year has taught us that the markets are resilient and can weather many storms even when stuck in the eye of the hurricane you cannot see the light of day.
Sorting through whom to believe in all of this – so far the media has put nothing but fear and panic into our heads. We have made several adjustments to many portfolios over the past couple of weeks and a few more will continue but no major changes. Earning season is upon us and we are looking for a positive one. Should there be some misses in earnings, we may experience some volatility. The Presidential Election is just a few weeks away which may also cause a stir in the markets. Investment wise we are erroring on the cautious side and staying with U.S. dividend payers. Unfortunately, healthcare has been a drag on our portfolios, but we believe it has bottomed and healthcare innovations are nothing but a positive story in the works. Merger and acquisitions are materializing, the biotech space is increasing with clinical trials, medical innovations and many more are all taking place. There may be some pullback in this sector depending on the elections since there are different views on healthcare from both candidates. However we will remain invested and perhaps increase our allocation to the healthcare sector. Technology remains in focus and we will continue to hold and look for areas of further interest. Some other areas of allocation will be an increase small-caps, a watch is on for the energy sector and for the conservative income portfolios we will add bond like or equivalent bond like holdings. Global and International holdings are always in our research, but at this time we remain with a very small international holding due to the volatility that currently comes with investing internationally.
With the election upon us in the 4th quarter, some unknowns remain in the market since this election is like no other. However, the market has withstood many storms and this is just one more. Keep in mind, the markets have never seen anything like Brexit before and look at the markets now. We continue to build a solid and well-diversified portfolio with your short and long-term goals in focus.
As always, should you have any questions or concerns, please feel free to contact any one of us on the KFA Team.
Knowing many of you love golf, we thought you might like this article that shares similarities to finances and investing.
Click HERE to be taken to the article posted on CNBC.com.
By: Jacqueline Whitaker - Business Manager
Cybersecurity. Hackers. Phishing. Whaling. Ransomware. Data Breach. Cybercrime.
These are just a few of the words in the “Cyber Speak” lexicon and, sorry to say, they are becoming common words to anyone who uses a PC or mobile device to conduct financial business. Cybercrime is a profitable business for those who practice it. The fraudsters are out there and after your identity. Fortunately, there are steps you can take to protect your valuable personal information from those who seek to steal it.
Even the U.S. government is aware of the risk. An executive order was issued for federal agencies to provide more secure authentication for their online services. Starting in August of 2016, any agency that provides online access to a customer’s personal information must use multifactor authentication. “Multifactor Authentication” means more than one method is used to make sure you are the actual owner of your account. For example, in addition to using a user ID and password to login to a website, you will also have to provide and additional security code that is texted to you before you can access the site.
Your team at Kabarec Financial Advisors takes the threat of cybercrime seriously. We are dedicated to protecting our clients’ personal information and to prevent unauthorized access to their accounts. Some of the methods we employ are vulnerability assessments by qualified IT specialists, use of enterprise antivirus software, two-factor authentication to access the network, and physical securities for our hardware. Our team takes advantage of training opportunities offered by a variety of vendors in order to stay up-to-date in best practices.
For a robust defense against cybercrime fraud, we need our clients to partner with us. Here are few ideas to get started:
- Install a spam manager, firewall, and antivirus program on your computer.
Do not use public WiFi to conduct personal business.
Bear with us when we make an extra phone call to verify it is really you requesting to move money.
Visit the Schwab Client Learning Center to view the Schwab Security Guarantee and to learn about SchwabSafe multifactor authentication. http://content.schwab.com/learningcenter/index.html
Engage in of our culture of protection by doing what you can to make it difficult for the fraudsters to steal your identity - and your money!