April 5, 2017:
While the upticks in both U.S. sentiment and the stock market are in part a reflection of the optimism over President Trump’s pro-growth plans, there is more to the story. The other main contributor is the collective recognition that we finally have a moderately growing… READ MORE…
January 6, 2017:
Trump/Economy
A large part of Trump’s political capital will be used to rewrite the tax code to lower personal and corporate tax rates and limit deductions (besides replacing Obamacare, increasing infrastructure spending, rolling back excess government regulations and probably a little tightening on immigration and increased nationalism to give red meat to his constituents). Therefore, an initial assumption would be to expect lower tax receipts and rising government budget deficit after the proposed tax cuts. Continue reading
The Volatile Path Back to “Old Normal”
After 2 weeks of absorbing the U.S. election results, watching the financial markets and reading countless market and economic commentaries, we offer the following condensed thoughts.
What was Expected?
While the election was thought to be close, the odds makers and thus the financial markets were clearly expecting a Clinton victory. That meant continued heavy entitlements, higher taxes, very low GDP growth, low inflation and a decent chance of a recession in 2017. All of this led to ultra-low interest rates and a relatively high stock market based on no real alternatives for positive risk based returns.
What Happened?
But Trump won. Now if, and a big if, Trump’s Republican-led houses get their way, we will see lower taxes (lower personal and corporate taxes and no 3.8% Obamacare tax), less regulation and all manner of fiscal stimulus that has so far been absent in our weak recovery over the last eight years. This would lead to higher GDP, higher wages, no recession and eventually higher inflation. The new premise is that we are headed back to the “old normal” of 3-4% GDP, 3%+ 10 year government bonds and higher corporate growth rates. Therefore, valuations multiples would also “normalize” with lower P/E ratios and higher cap rates for real estate.
January 5, 2016 – Universally, Wall Street’s stock market outlook assumes muted gains as they prepare investors’ expectations for another year of struggles. With the S&P 500 and NASDAQ at a 23 P/E ratio (according to the Wall Street Journal on 12/31/2015), we cannot disagree… and we don’t like swinging at bad pitches. Therefore, we continue to avoid U.S. stocks and anticipate that future volatility will bring us better values with which to reenter the markets in the future. The current weakness in oil (which is at an 11-year low), general commodities and emerging markets will produce a sizeable rebound when the world economy finally regains its footing.
Since the Federal Reserve announced their intent to raise rates up to 8 times over the next two years, interest rates will continue to be a focus of the financial markets. We doubt that the U.S. economy will avoid a recession over that time period and allow short term rates to rise that far. Read more about our anticipations in the First Quarter 2016 Economic Update.
National Storage Affiliates (“NSA”) REIT Goes Public on NYSE
CLICK HERE to view a quick video of Mark Van Mourick and Warren Allan of Optivest alongside the other founders of the National Storage Affiliates (“NSA”) REIT ringing the opening bell of the NYSE for the first day of trading on their successful initial public offering (IPO) on April 24, 2015.
National Storage Affiliates IPO Press Release
National Storage Affiliates REIT IPO April 24, 2015
g
US ECONOMY: After years of tightly banded earning results for public companies, second quarter 2015 earnings are showing large discrepancies in results due to our strong US Dollar, drastically lower oil prices and a tightening wage market. This has caused a wider disparity in price returns that favor smaller, domestic companies that look more like Main Street. The US economy is enjoying continued modest growth but both US stock and bond prices are near all-time high valuations and are vulnerable to setbacks if the fine balance of ultra-low inflation and exceptionally high profit margins gets disruptive. (See our Important Economic Update from April 1st.)
CLICK TO READ MORE: Second Quarter 2015 Newsletter
g
Family Lesson Inspires Unique Model for Corporate Giving; Changing the Lives and Hearts of Employees and Charities Around the World
Unlike most financial advisors, Mark Van Mourick did not earn his stripes on the back of a client’s portfolio. He lost both parents in a plane crash at the age of 12 and bounced around several foster homes,
US Economy
2014 started with a 1.9% drop in the first quarter GDP, increased 4.6% (revised) in the second quarter, and further gained 5.0% (revised) in the third quarter. This 5.0% gain was the best quarter since 2003 (Reuters) and the fourth quarter of 2014 is expected to be strong as well. Consumer sentiment has steadily increased along with business and consumer spending; the economy is finally in a healthy recovery mode. Low inflation (helped by lower inflation in Europe and a drop in commodity prices) allowed interest rates to drop back to 2% levels on the 10-year Treasury Bond. We have now moved from a fragile economy which was threatened by rising inflation to a healthy economy likely to enjoy relatively low inflation over a couple more years. The financial markets responded with the average US stock fund rising 7.6% and most other asset classes gaining 1-5% (WSJ).
CLICK TO READ MORE: First Quarter 2015 Newsletter
g
February 27, 2014 by Kevin Noblet:
“It’s all too common a situation: A client has beloved possessions that he or she thinks the children will treasure someday, too. But have they ever been asked if they really want the house, antique furniture or whatever it is dad or mom held so dear? No, they haven’t. California wealth manager Mark Van Mourick relates just such a case to Wealth Adviser at WSJ.com. The client had $250,000 in Asian art she and her late husband spent 50years collecting. She didn’t want it sold off after she died but, when asked at the adviser’s suggestion, the kidssaid they were likely to do just that. Mr. Van Mourick helped with an estate plan which took that reality into consideration.” READ FULL ARTICLE HERE
g
The New Roundtable:
Planning a business sale is no mean feat, something the members of the Orange County Exit Planning Roundtable (OCX) know all too well. These highly skilled Roundtable members specialize in helping to facilitate the sale of some of the OC’s most valuable companies.
The Orange County Exit Planning Roundtable is a “top of their field” group of professionals with complimentary disciplines, who specialize in working with owners of privately held, middle market companies who intend to exit their companies in the next few years… (READ MORE) Continue reading
