Do You Prefer a Window or an Aisle Seat?
You know that point in the flight after the pilot says flight attendants please prepare for landing, when everyone starts to look out the window to see the landscape from above, to gain a clearer view? Regardless of whether you’re in a window or aisle seat you’ve probably found yourself trying to get a glimpse of what life looks like from above. This is exactly what you should expect from your financial advisor.
As you are caught in the day-to-day of working hard to prepare for your future, someone should be managing the big picture to keep you on track for whether and when you’ll reach your destination.
Here is a list of what you should expect from your financial advisor:
Your advisor should serve as the pilot guiding you in the direction of your next move. Regardless of turbulence in the world, s/he should still get you to your destination safely. Aware of your goals, you can trust your advisor is on your team.
You should not feel uncomfortable in the middle seat nor should you feel pushed into buying any specific products. Although various insurance or investment products are necessary in your financial plan, your advisor should make recommendations on what you need. S/he should offer to provide any additional resources for where to obtain these products, as needed.
You should know what is going on in your financial plan. It should not seem like a foreign language, but rather something you are a part of and understand. A financial advisor should be able to provide the facts in the following areas:
Insurance Planning Investment Management Tax Planning Financial Planning Estate Planning Education Planning Retirement Planning
When you work with a financial advisor you should feel like you are First Class.
- Just as the entire flight crew is important, so is your advisor’s team. This support is important in completing the journey ahead.
Our team, here at Kabarec Financial Advisors, Ltd., feels it is crucial to provide our clients with quality service they can expect! We strive to give every client a First Class experience. If you or someone you know needs guidance from a professional, please contact us at 847-934-7777 to schedule an appointment today.
We’ve just entered the New Year, making it the perfect time to take stock of 2013 and share some thoughts on how we can help position your financial life as we continue down the road in 2014. There is no better place to start than to re-create the atmosphere that greeted investors at the conclusion of 2012. The country had just emerged from a bruising presidential election, and the fiscal cliff loomed large over the economy and the markets.
Without any action by Congress, steep tax increases were scheduled to take effect, threatening to tip the economy into a recession again. At the midnight hour, Congress managed to craft a narrow bill that raised taxes for the wealthiest Americans – about 1% - while maintaining the Bush-era tax cuts as law for the rest of the population.
Nevertheless, the economy sidestepped the fiscal cliff, a stiff headwind for the market was removed, and stocks roared out of the 2013 gates, foreshadowing what would be the best year for the S&P 500 since 1997, according to data provided by the St. Louis Federal Reserve.
There are a number of good reasons why the U.S. markets performed so well even though the economy seems to be limping along.
First, with job growth in low gear and inflation even lower, the Federal Reserve embarked on a series of bond purchases, popularly called quantitative easing, or QE for short. Remember, by definition, rising bond prices equate to falling yields. The Fed’s goal? Put downward pressure on rates in the hopes that consumers and businesses would borrow and spend, sparking job growth.
Second, record corporate profits were a factor in market performance. According to Thomson Reuters, earnings per share (EPS) for S&P 500 companies hit a record in the first quarter of 2013, and subsequently broke the record in the second and third quarters, respectively.
Reviews on the effectiveness of QE have been mixed, but one thing seems certain: The Fed’s ultra-easy monetary policy has been a boon for the stock market.
Moreover, analysts are forecasting another high in fourth quarter profits. Though, economic growth has been slow, we have had very modest revenue gains, coupled with controlled expenses, which have been good for profits.
Third, many companies have more cash than they know what to do with. Given heightened levels of economic uncertainty and few opportunities to expand, companies are buying back stock (or borrowing at record low interest rates to finance purchases).
In addition, the crisis in Europe has eased. Even though Europe is by no means out of the woods, conditions have improved due to the Central Bank of Europe flooding the continent with money to stabilize their economies, just like the United States. Japan is also flooding its economy with yen in the hopes of stimulating its economy and ending their cycle of deflation.
The 2014 Crystal Ball: The Goldilocks Economy?
The factors that drove the stock market to new highs remain in place, including the super low Fed Funds interest rate, further expectations of corporate profit growth, and the continued belief that companies will continue to return cash to shareholders in stock buy-back and dividend increases.
Here are some further thoughts:
1. The Economy: Still growing slowly with the Federal Reserve’s easy money policy. Strong corporate and household balance sheets, a continued improving housing market and lower energy prices should bolster consumer and corporate confidence.
2. Interest Rates: Expected to be higher, but not through the roof. The Federal Reserve will keep short-term interest rates at near zero with the intention of continued economic stimulus for business and consumers.
3. Inflation: There is little core inflation and the risk of some deflation. Inflation is low because wages are not growing, factories around the globe have excess capacity, and bank lending is still not growing.
4. Employment: The job market is improving, but wages are not increasing. We are seeing steady but slow increases in the number of jobs created. Except in specialized technical professions, wages are stagnant.
Despite these positive points, there are also words of caution. Slow wages growth may affect consumer spending and consumer confidence. The continued political dysfunction of our Federal and State governments is an area of concern. This dysfunction could cause increased volatility in both the stock and bond markets. While short term interest rates will remain at close to zero, intermediate and long term rates are rising due to market conditions. At this point it is unclear how they will affect the equity markets, but one thing is certain, it will affect traditional bonds. As interest rates rise, prices of bonds fall. So we have made adjustments in our bond sector portfolio allocation.
How does all of this affect you and your portfolio at KFA?
As we write this letter, your team at KFA is in the midst of its quarterly review. As part of our review, KFA starts with a broad, global, macro-economic picture, and then selects regions, sectors, and specific investments. As a result of this review, there will be significant changes to many client portfolios as we try to take advantage of the macroeconomic themes discussed earlier. As stated before, we are concerned about the valuation of traditional bonds. We have spent considerable time researching safe and profitable alternatives and will continue to add these alternatives to client portfolios.
As always please contact us to discuss any aspect of your financial life and of course your portfolio. We are at your service.
Thank you for your continued confidence and support.
We are pleased to announce that Kabarec Financial Advisors, Ltd. has been named as one of the Best Financial Advisers for Doctors in 2013 by Medical Economics. Throughout the years Kabarec Financial Advisors, Ltd. has been recognized in various magazines and articles such as, the top ten of the Most Dependable Wealth Managers of the Great Lakes by Goldline Research, in Worth Magazine as one of the Top 250 Wealth Advisors for a Challenging Economy. We are always grateful and humbled by the support of our clients.
Please click here to view the magazine reprint.
We are utilizing very unique technology to help you create a more organized financial life! We have created a solution so help you solve the problem of providing sufficient information to those responsible to act in your place. Please call or ask us how we can help you get organized as you reach your financial goals. Click here for a great starting point for gathering everything necessary to get organized.
Financial organization is a cornerstone of a healthy financial life. At the most basic level, financial organization saves time and money because it aids in paying bills on time, being able to find needed documents during tax season, providing proof of payment, disputing credit card or billing errors, and avoiding the stress of dealing with piles of unorganized bills and papework.
It also sets the stage for better financial decisions surrounding investments, budgeting, debt, and investment planning. Financial organization helps your working relationship with your financial advisor, because there will be less time spent looking for paperwork and more clarity around the overall financial situation, leading to more informed decisions about your investments and financial plans.
Since 1982, Kabarec Financial Advisors has helped its clients reach their financial goals. KFA offers financial planning and wealth management services primarily to small businesses, individuals, and their families. As independent Registered Investment Advisors, the firm offers objective and impartial recommendations on a "fee-only" basis without the influence of product or sales commissions. KFA provides their clients with objective advice uniquely tailored to their financial goals and objectives. Kabarec Financial Advisors prides itself by being large enough to serve, small enough to care.
Kabarec Financial Advisors’ experts have extensive experience and training in several aspects of financial planning and investment management. Their associates hold one or more of the following professional designations: Certified Financial Planner (CFP™), Personal Financial Specialist (PFS), Certified Public Accountant (CPA), and Masters degrees.
As we celebrate our 31st anniversary we thank you for your continued trust and support!