4th Quarter Newsletter

Normally our quarterly newsletter is dedicated to investment related matters including market performance and news related to individual issues that may or may not be in your accounts. While important, your investments are only one facet of your total financial plan. For this issue of the newsletter, we would like you to think about the following in terms of your total financial plan.

1. Have you recently had a life changing event (marriage, divorce, childbirth, etc.) that warrants a new look at your current financial plan?

2. Are you on track for your retirement, college savings, or other savings/investing goals? When was the last time you updated these projections? Do you have well thought out, written goals for these objectives?

3. When was the last time you reviewed your life and/or disability insurance coverage? Is your current life insurance coverage adequate for your needs? Do you need to increase or decrease your coverage to reflect current needs? Is your current disability insurance in line with your current salary and needs should you become disabled?

4. Do you believe that, at some point in your life, you will require Long Term Care services (nursing home, home health care, etc.)? If so, what action have you taken to address this issue?

5. When was the last time you reviewed your wills, powers of attorney, and advanced healthcare directives? Do these documents meet your current needs? Are the Personal Representatives named in these documents aware of your wishes, and are those representatives still valid for your current situation?

6. Are the primary and contingent beneficiaries on your investment accounts, life insurance policies, and wills up to date? Do these beneficiary selections meet your current wishes as to the disposition of your assets upon your death?

If any of the above questions cause you concern, or if you would like to begin the discussion concerning any or all the above issues, please contact our office to set up an appointment. As financial planners and Chartered Financial Consultants®, we are invested in ensuring we address not only your investment portfolios, but also the areas listed above.

On another note, you all know that we have had some personnel changes at the firm this year. We appreciate your patience as we have worked to overcome these challenges. In July, we welcomed Lisa Bolduc to our administrative team.  Lisa brings a wealth of experience, ranging from Air Force service to non-profit work, and has already proven herself to be an invaluable asset to the Eagle Financial team. We are very glad she accepted our job offer!

Those of you who have positions in the private placement real estate investment trust sponsored by AR Global will see a reduction in your quarterly bill. This is due to the fact that the redemption programs for these issues have been temporarily suspended. Once the companies resume their redemption cycles, we will begin billing on these positions again.

And finally, with the announcement that Equifax, one of the “big three” American credit bureaus, suffered a serious cyber-security breach recently we want to ensure our clients that keeping your personal identifying information secure is a top priority for our firm. While we feel that we’re taking proper steps in our firm’s security measures, we’re encouraging our clients and their family members to also take steps to help protect their identity and reduce potential security risks. We invite you to visit our website and view our Reducing the Risk of Cyber-Security Threats blog post.

We greatly appreciate your continued trust in Eagle Financial Strategies. From all of us here, we hope you have a great fall.

Very Respectfully Submitted,

Park O. Johnson III                                           Andrew W. Shuman

Reducing the Risk of Cyber-Security Threats

With the announcement that Equifax, one of the “big three” American credit bureaus, suffered a serious cyber-security breach recently, we want to ensure our clients that keeping your personal identifying information secure is a top priority for our firm. To better protect you and your accounts from cyber-security threats, we are continuously reviewing and updating our internal security procedures to ensure that we are following best practices recommended by the custodians, financial institutions, and industry experts we work with.

While we feel that we’re taking proper steps in our firm’s security measures, we’re encouraging our clients and their family members to also take steps to help protect their identity and reduce potential security risks. Here are some suggestions to help reduce the risk of cyber-security threats:

MANAGE YOUR DEVICES 

  • Install the most up-to-date antivirus and antispyware programs on all devices (PC’s, laptops, tablets, smartphones) and update these software programs as they become available.  Set these programs to run regularly vs. running periodic scans to provide maximum protection.
  • Access sensitive data only through a secure location or device; never access confidential personal or financial data via a public computer (such as in an airport, hotel, or library).
  • If you have children, make sure you enable restrictions on your computer to prevent them from accessing certain types of websites, and monitor their activity. If possible you may want to set up a separate computer that they can use just for games or other online activity.

Continue reading “Reducing the Risk of Cyber-Security Threats”

3rd Quarter Newsletter

Greetings from the crew at Eagle Financial Strategies. We hope this finds you all well.

Following please find our commentary on the markets in general as we go into the second half of the year. But first, some issue specific news concerning those of you who hold American Finance Trust.

American Finance Trust, as of their director’s meeting on June 9th (we were notified on 6/27) has suspended their redemption program for now (with the exception of death or disability of the shareholder), including the redemption we were supposed to have in July. Their rationale for this is that the constant redemptions were hurting their ability to use their cash to make further investments for the Trust to strengthen the underlying portfolio. The company reiterated that these are intended to be long term investments, generally using a 3 to 5 year time frame. American Finance Trust is currently in its third year of operation. They did not indicate when the next round of redemptions would be.

While this means that it will take a while longer to fully exit this position, there is a positive takeaway. At their current dividend of $1.30 per share per year, the annual yield on the positions held in your portfolios that have this issue is slightly above 6%.

Now on to the markets in general. The “Trump Rally” continues to produce decent returns in almost all market segments. Although the markets seem to be rangebound over the last few weeks, year to date (through 6/30/2017) performance for the major indices is as follows (Source: Morningstar):

Dow Jones Industrial Average + 9.35%
Standard & Poors 500 Index + 9.34%
Russell 2000 + 4.99%
MSCI Europe Asia Far East +13.81%
MSCI Emerging Markets +17.22%

As you can see, in general, it has been a good year so far. Even in a rising interest rate environment in which fixed income investments normally do poorly, the Barclay’s US Aggregate Bond Index is up 2.27%.

This, however, causes us pause. We believe that, going forward, we need to be very cautious and prepare ourselves for increased market volatility. We base this cautionary stance on the following factors:

1. Since spring of 2009, with the exception of a small pullback in 2015, the markets, as a whole, have been going up.

2. We believe in “reversion to the mean”, in which the markets need to adjust back to their traditional, historical rates of return.

3. We see investors getting extremely comfortable with the relatively low levels of market volatility. This comfort level often leads to unrealistic expectations that the markets will continue their upward trend indefinitely.

So, how do we prepare for what we believe is a return of volatility and perhaps a broad market pullback? We offer the following suggestions.
First, realize that, for the most part, your portfolios are built for the long haul. Increased volatility allows us to create buying and selling opportunities, while market pullbacks allow us to buy your investments and reinvest your dividends at better prices.

Second, understand that making knee-jerk reactions to short term market movements can derail your long term investment program. Sometimes doing nothing is better than doing something. Portfolio activity does not always translate to positive, long term outcomes.

Finally, if and when market volatility returns and/or we begin to experience a market pullback, talk to us if the market action is causing you stress. There are many steps we can take to help you through the market declines including investment education and re-evaluation of your risk tolerance, among others.

In other developments, we are continuing to refine our portfolio modeling program. Most of you will see some additional trading activity in your accounts as we continue this process.

In closing, we want to reiterate how much we appreciate the trust you place in us to handle your financial affairs. In terms of personnel, we have been going through some growing pains over the last few months. Thank you all for your patience. We will be announcing a new hire soon.

As always, please contact us with any questions or concerns. On behalf of all of us at Eagle Financial Strategies, we hope you have a great Summer.