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

A Summer Hiatus

Eagle Financial Strategies will be taking a break from publishing blog articles for the summer months, with the exception of our 3rd quarter newsletter and any urgent items that may arise.

As always, please call or email the office with any needs you may have. Have a great summer!

The Dilemma of the Record High Market

In the aftermath of President Trump’s address to the joint session of Congress, the stock markets are continuing their push to all-time highs. This scenario creates quite a dilemma for those of us in the investment advisory business. Do we continue to invest in stocks when the market is at record highs, or do we let cash build up in the accounts waiting for a pullback in stock prices? As we state quite regularly, our crystal ball is broken, and we cannot accurately predict the market’s next move.

Following is a link to an article by Charles Rotblut, CFA, the editor of the AAII Journal. He discusses this issue far more eloquently than I ever could. Please read the article by clicking here (linked with permission from the AAII editorial department).

Here is our takeaway from the article. The market may continue to go up, or it may pull back. We know, that at some point, the markets will correct, and the value of our investments will go down. This being said, we do not know the timing or magnitude of any future stock market corrections. These corrections could be as severe as 2008-2009, or as benign as 2015. This unknown actually helps us stick to our strategy of remaining fully invested in a properly diversified portfolio based upon the investor’s risk tolerance and goals, and continuing to invest at regular intervals regardless of where the market is. Please see our 1st Quarter 2017 Newsletter for a discussion and study on the effects of trying to accurately time the market’s ups and downs.

On another note, if you have any ideas for topics you would like to see addressed on our blog, please email me at andy@eaglefinancial.us.

Got Pot? We Say “Not”!

With marijuana legalization slowly spreading across the country, we are beginning to see a lot of advertising promoting investing in marijuana industry related stocks. We question the integrity of many of these promoters.  At this time, we recommend avoiding these issues for the following reasons.

First, many of these companies are in the start-up phase. They have very little in the way of revenue, and most are not profitable. We believe that it is too early in the business cycle to consider putting capital at risk in these types of companies.

Second, many of the legalization statutes enacted, Maine’s included, have provisions that all but exclude large corporations from participating in this market. This is most likely detrimental to the growth of the industry. While the rules may be good for local businesses, “staying small” has never been a good strategy in terms of properly developing an investment- worthy market sector. We believe that, once the major companies (read Altria Group, British American Tobacco, etc.) begin to develop brands around marijuana much like they did with e-cigarettes and vaping, it will be time to consider investing in the sector if one chooses to support that sector.

An argument can be made that one would want to be in the sector before the large corporations get in. In this case, with all of the variables surrounding the implementation (and legislative delays thereof) of the marijuana legalization statutes, we do not believe the argument to be valid.

Finally, and perhaps the biggest reason we recommend avoiding these issues, is that marijuana is still classified as a Schedule 1 drug at the Federal level. There has been no assurance from  the Federal government that they will continue to tolerate state laws concerning both medical and recreational marijuana.  The risk of the Federal government stepping in and enforcing the drug laws has the potential to destroy the semi-legitimate portions of this industry, almost overnight. Again, this poses what we believe to be an unacceptable level of risk on these investments. In this case, as in many cases in the investment world, this risk is best avoided.