KFA Blog

Brexit Relief Rally

By:  Lisa Thuer - Senior Trading and Research Specialist

As the dust settles from Brexit, markets are close to back where they were a week ago. Even though we did take some money off the table and did not panic, we are confident that the funds will be deployed to more profitable and less volatile investments. There has been a quick run up after the drastic down turn from Brexit and it almost feels like whiplash. The second quarter ends today and Alcoa kicks off second quarter earnings on July 11th.  We will wait till next week to start investing cash that is sitting on the sidelines. Everyone wants to get in when the markets are going up and sell when the markets are going down. Keeping long-term goals in mind and ignore the everyday noise is what we all need to remind ourselves. Patience is a virtue in these markets.  Stick with the fundamentals, stay diversified and don’t panic. 

We are looking forward to a better second half of the year.

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Brexit - Day 2

By:  Lisa Thuer - Senior Trading and Research Specialist

The sell-off continues, however we do not believe it is the end of the world. What happened in the United Kingdom is not a collapse, but a country voting for its independence. Contagion is taking place as it is easier to sell now and decide later what the outcome of Brexit will be good or bad. Truth is no one really knows how this will play out and markets do not like uncertainty. Therefore as we have said before, volatility will continue but the world is not crumbling around us.

To minimize the risk and volatility in your portfolios, we have sold some positions which are most exposed to these areas. When we took our position in the financial sector – rates were increasing which is good news and a bet on financials. Just prior to Brexit, banks passed their annual stress tests and they were leading the markets. Then Brexit hit and the possibility of a rate increase this year is minimal and the outcome of Brexit on banks is uncertain. It is NOT a 2008 financial crisis all over again, but money held in these holdings may be stagnant for a while. The other area where recovery was taking place is Europe and Japan. The currencies were also hedged in our holdings (a benefit in their recovery stage) however Brexit may have put this recovery on hold for the time being and therefore we are not seeing further opportunity at this time. Therefore in the coming days, we will bargain shop in value and dividend payers that have been beaten down.

Positive areas throughout this turmoil have been utilities, fixed income and alternatives. These unexpected worldly situations that occur are reasons why we remain diversified and hold alternatives which help us weather the storm through these difficult markets. We are taking this opportunity to realign our portfolios and be opportunistic.

As always, should you have any further questions, please feel free to contact a team member. 

 

 

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Market Conditions - Brexit Blindsides Markets

By:  Lisa Thuer - Senior Trading and Research Specialist

 

The unexpected happened. Even though the polls were close, the markets were pricing in that the United Kingdom was going to STAY in the EU. Till the vote came in 51.9% to Leave and 48.1% to Remain. Markets tumbled overnight in the wake of the shock. British Prime Minister Cameron has resigned but will stay on over the next weeks and months until they find a replacement for him. 

What does this mean for your portfolio and investments? These are times we wish we had that crystal ball, but in reality we have to base our research on what is available to us and unfortunately that crystal ball is not within our reach. The first reaction is always to sell, sell, sell. Hitting the panic button isn't always the right answer. We will chose to be opportunistic and you will see changes as early as next week to your portfolios and taking risk off the table. Markets tend to settle down after a major sell off and we will stay the course and make adjustments accordingly. 

Please feel free to reach out to us should you have any questions. 

 

 

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The Dress Rehearsal No One Gets: ONE SIMPLE STEP

The Rehearsal for what will happen when you are no longer here
By:  Michelle Smalenberger, CFP® - Vice President and Financial Advisor

Have you ever caught yourself curiously considering any of the following questions?

“Who will attend my funeral?”

“Will there be money to leave to my heirs?”

“How will that money be spent?”

“Will my loved ones be taken care of?”

“What does the process REALLY look like after I am no longer here?”

The truth is that every day we are responsible and in control of the decisions we make.  We choose to get up and go wherever the day may lead.  But none of us knows the day when we can longer choose to get up and go.  Does this sound morbid, sad, or make you feel fearful?  It is reality that not even one person has naturally remained alive in their physical body forever. 

Letting this reality sink in for a moment can now lead to refreshing action to live with clarity, purpose, and refreshing conversation.  There are pieces of this Dress Rehearsal that will never happen, but one that doesn’t have to be unclear is that of your financial remains.  I work with many clients before, during, and after a loved one has left our lives.  I can assure you that by making this one area of your life clear you help yourself while you are living and your loved ones for a day in the future.

Where should you start?  Below are steps for a Dress Rehearsal to gain clarity and find points of pain.  If you can answer these with a resounding “Yes, I have these in place” or “Yes, I have done this”, then you are making great strides for the future:

Schedule a meeting with the person you have selected to act for your financial matters after you pass away.  If it’s your spouse, then it may be as simple as making the time for this exercise.  Then do the following:

1)  If something happened to me RIGHT NOW, do you know where to find needed information to act on my behalf?

2)  If you really want to know how good your system is and this is a loved one, maybe let them search where they would go to see if they can find what is needed.  (You must trust the individual in this position.)  The idea here is that organization to one person is different to another person.

** While you are reading this, your stomach may drop then I would suggest you let them see what they can find.  IF you do feel this, it may be a good indication that you should strongly consider the individual you have in this position.  If you don’t like the thought of them going through your personal belongings while you’re alive, would you after your death?  It may be ok, but please consider these individuals carefully.

Characteristics of a qualified person:

-       A spouse or loved one who is aware of the financial transactions that happen regularly in your household  (expenses, income, maybe investment and assets too)

-       A family member you trust that has experience handling an estate or financial affairs of another person

-       A family member you trust that may work as a Financial, legal, or tax planning profession

-       Consider the age of the individual and the life events they may be dealing with while also managing your financial affairs

-       Consider their ability to manage multiple items at once to get things done

-       Consider if this person has similar life affairs so they will be educated on what to do

Make sure you have clear lists or notes of instruction.  If you have a financial advisor it could be as simple as leaving their contact information in a place that’s easy to find for responsible individuals to call when it becomes necessary. 

The largest takeaway is that if you leave things to chance, there is a high likelihood that your wishes or goals will not be carried out as you wished.  By doing some advance planning and organization you save yourself and your loved ones time, hassle, and even money.  Disorganization can cost you money if things are not handled properly.

Planting seeds of fear is not necessary for us to call people to action.  What can be helpful is reading someone else’s account and experience to share that there is value in planning ahead.  Read the following article of one family’s experience in the Wall Street Journal of getting involved when they were acting later than hoped... Click HERE.

As always, we can help you get organized, create a financial plan, and maintain that into your future!  Please call if we can be helpful to you or someone you know.

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In Search of the Perfect Graduation Gift

By:  Lisa Thuer - Senior Trading and Research Specialist

 

Are you in search for that perfect gift for the new graduate? Do you give them money? Or do you give them a dust collector to sit on their shelf which does just that and collects dust? Why not help them start their nest egg and watch it grow. There are various ways in which you can help them. A recent article from Charles Schwab entitled Help Your College Grad Become an Investor includes four ideas that are easy and won’t break the bank to start saving.

 

1) Match savings contributions

2) Fund an IRA

3) Give stocks with youth appeal

4) Automate investing

 

Overtime with the graduate’s long time horizon, they can accumulate a nice nest egg without sacrificing much at all and wouldn’t it be nice for them to actually be able to choose a few companies they like and watch them grow?

 

If we can be of help with setting this up or giving you ideas, please feel free to contact one of our team members at 847-934-7777.

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