“Active funds are now 71% overweight in the FANG companies after making the biggest move from value to growth since 2008.”  . . . Bank of America  June 2017

Save the date of October 14th. We are putting together plans for our Client Appreciation Picnic for that day. We look forward to hosting all of you at Mike’s historic property for a nice afternoon. We will send out details as the date approaches.

If you are looking to get a better handle on your finances, we have a great new online tool for you. eMoney is an online financial management tool that helps you to better understand your investments and spending. It also has some great cash projection tools to help you visualize your net worth in the future. We have been rolling it out to interested clients with positive reviews. If you are interested in checking it out, let us know.

We are value investors. What does this mean? Our main objective is to protect our client’s capital, get them a fair rate of return and fund their retirement needs. How do we achieve that? We look for assets that look to be trading at a discount to the market so that we can benefit when the market recognizes their inherent value. While we do hold some growth stocks, we do not believe in chasing after growth, especially after they have already taken off. The market is currently being driven by a handful of large, technology, growth stocks. While we own some of these stocks (Apple, Google, Facebook), we do not over-own them to the degree that the capitalization weighted stock indices own them. As these growth stocks go higher, they become a bigger weight in the stock market indices and drive the indices higher.

Since these stocks have had such a nice run the first 6 months of the year, there is a nervous energy in the market as to what may happen next. In our opinion, there are some growth stocks that have run up excessively. We don’t own those stocks. Instead, while we see the economy continuing to recover and grow through the end of the year, we expect the market to rotate out of growth and into value stocks which will improve our returns versus the market. Prudent investors keep a broadly diversified portfolio. We will continue to do that for you, making sure that we don’t have all of our eggs in one basket.

On the “Keeping Things Simple” front, there is good news for married couples. The estate tax exemption has been simplified. Now, it is very easy for married couples to port over the remaining estate tax exemption from the first to pass to the surviving spouse. This means that when the surviving spouse passes, they will be able to exempt up to $12 million in assets from taxation. This is one more reason why most married couples do not need to set up a trust to avoid the estate tax. If you have any questions about trusts (or if you think you need one), give us a call.

Very truly yours,

Michael Cantlon
Thomas Guyett
Robert Gephart