The Current State is not the Permanent State

Back in July, we became more concerned about economic conditions: rising interest rates, trade tariffs, and a split Congress. We then acted to reposition investment portfolios to be more defensive. As we scaled back stocks we increased short-term fixed income and cash reserves. For a few months it seemed we prepared a bit early for a downturn.  Indeed the stock markets changed direction in October, with the U.S. averages falling over 10% from their peak and global markets falling over 20%. While there are no signs of an imminent recession in the US it is clear that this sell down is broadening.

Market declines are part of investing and they haven’t lasted forever.  The Dow Jones Industrial Average has typically dipped at least 10% once a year, and 20% or more every 3.75 years, according to data derived from 1900-2017. Bear in mind there has never been a time when markets declined and haven’t recovered to advance to higher levels.

Wall Street is on Sale

A lesson that I have learned is to seek and take advantage of market weakness. Declining markets give you a chance to invest in world-class companies at lower prices. Good companies find a way to prosper regardless of the environment.  Our process is to rely on research, experience, and judgment to buy good companies at attractive prices.

If you want to make money over time add to your investment portfolios in this period of volatility and lower prices. Invest systematically—we can help you to be set up with monthly electronic bank drafts into your accounts, additions can be started, stopped, increased or decreased at any time.  Supercharge your accounts by moving larger chunks of excess cash which may be earning a low-interest rate to your investment account.  Add to your children’s and grandchildren’s 529 accounts now, college costs never seem to go down and your family will appreciate the gift of an education.

No one can predict short-term markets and investors who sit on the sidelines risk losing out on periods of meaningful price appreciation that follow market downturns. Focus on the benefit of long-term investing and be decisive while this price decline presents the opportunity. Stay on the road with your investment plan, talk with us to voice your concerns.

Seminar:  Three Winning Strategies

Over the years we have helped you to plan, invest and protect your wealth. We have helped you with your tax planning and tax returns, and we counsel many of you to prepare an estate plan. Now, we want to help you to organize your personal data, have constructive conversations about intergenerational family finances and to make the best decision you can for your current healthcare coverage.

Join us on Thursday, November 15, 2018, from 10 am-1pm at Scarritt Bennet Center. We’ll be hosting an event we call:  Three Winning Retirement Strategies

You are going to learn from experts what happens within families as they talk about money and plan for the future.  You are going to learn about the most current Medicare and healthcare plans. And, we’re going to tell you stories about what individuals and families need to do prepare for medical emergencies that happen in all our lives. One of our solutions is to offer everyone attending a Free Ice Key

The ICE Key is a portable, easy-to-use USB flash drive that goes right on your keychain. We’ll help you to fill out the pre-loaded PDF forms with your important medical information. In a medical emergency, first responders are trained to look for the acronym, ICE (In Case of Emergency) so doctors have the information they need to make life-saving medical decisions.

Lunch and parking passes will be provided to those who RSVP. Who else do you know that might benefit from a key?  Feel free to bring a friend.


To RSVP please call Liz Clay at 615-673-7795 or CLICK HERE

Get a FREE ICE Key and Be Ready for a Medical Emergency


As we age, having our affairs in order is more important than ever. And I’m not just talking about our own personal affairs, but those of our parents and children, too. Many boomers are now caring for aging parents, which requires knowledge of all their medical conditions, prescriptions, allergies and more. If we’re lucky, this information is recorded somewhere, but too often it’s not.

Plus, as our kids leave for college, we must be able to manage their healthcare from afar. Even though we try to equip them to be self-sufficient and use good judgment, they’re still college students who may not be as organized as they should be, especially if a medical emergency arises. Plus, the ability to share a student’s healthcare information — even with parents — is often limited due to of HIPAA regulations.

In the case of a medical emergency, having important details readily available to medical professionals can be the difference between life and death. An innocent drug prescription can be lethal when taken in conjunction with other medications. It has been reported that Adverse Drug Reactions (ADRs) seriously injure up to 2 million hospitalized patients and cause over 106,000 deaths annually. In most cases, doctors simply lack the medical information they need to treat their patients.

The Solution: The ICE Key

This portable, easy-to-use USB flash drive goes right on a keychain. In a medical emergency, first responders are trained to look for the acronym ICE (In Case of Emergency), ensuring that medical professionals will have the information they need to make life-saving decisions.

Simply input important medical information on the PDF forms pre-loaded on the ICE key. This is not only critical to nurses and doctors but can also allow them to communicate directly with you as the person to contact in case of an emergency involving a parent or child.

Get a FREE ICE Key

Contact us today to schedule a review and we’ll give you a free ICE Key and help you complete the pre-loaded PDF forms.

Back to School Checklist

As school starts up again, we at Snow Creek want you and your child to be as prepared as possible. Here are a few things you might consider as we begin a new school year.  Read more…

Cash is an Asset Class

At this point we are thankful for the financial gains that have come in this current bull market. Starting in March of 2009 we have had over 3,400 calendar days of gains, the second-longest growth run on record since WW2. In most accounts, we have held firm to the growth story keeping our foot on the gas and “overweighting” stocks in the investment portfolios.

Read more…

New Understandings, Better Results

This year I set a goal for myself to learn more about new technologies that are being offered to financial planning and wealth management businesses like ours. I have always thought if I could take knowledge and turn it into value then it would be good for all concerned. Our goal is to offer comprehensive strategies and give advice on how to use financial planning to set a course for the investment process.

I wanted to learn if and how these new technologies could help our clients. New trends like big data, artificial intelligence, behavioral finance, digital wallets, e-documents, and smart portfolios are mixing in with the reliable old rules like diversification, tax-efficiency, and ethical behavior.

Valuable Courses, Conferences and Continuing Education

Each of us at Snow Creek has attended online courses, conferences, and conventions where Business School Professors, Money Managers, Economists, Mathematicians, and Research Scientists gave us their opinion on many trends, strategies, and techniques. Luckily for our pocketbooks, Nashville is now a popular convention destination, and we could sit and listen for hours while educators and sponsors from the International Association of Advisors in Philanthropy and the Investments and Wealth Institute came here to deliver almost five days of presentations.

We went for two days to an advisor summit in New Orleans to learn about intelligent systems for wealth management and personal financial wellness. We chatted with many software vendors for wealth advisors and subsequently looked at many “demos” of the newest and smartest iterations of their software. I went to NYC to attend a JPMorgan conference for advisors and listened for two days to world-class money managers who bring big data economic analytics to bear on investment decisions for enormous pools of money.

Professionally I have to complete continuing education requirements every two years to maintain my Certified Financial Planning Designation. Being a Certified Financial Planner, CFP® is about extensive training and experience along with professional integrity. This year our learning honed in on our obligation to always act in the best interest of our clients as a fiduciary.

Better Tools, Better Planning

In my opinion, it’s a good idea to constantly work on your professional skills, learn continuously, finding mentors and resources that guide you to carefully use knowledge and experience to make decisions. Our investment values are clear, and our work begins collaboratively with each individual, family, estate or trust in a one-on-one Financial Planning process.

Once we establish your objectives we must gather your data, organize it, analyze it and use the results to establish a course to achieve long-term financial goals.  To facilitate that we can now offer you convenient financial data aggregation tools that consolidate and simplify your various accounts.

From there we can analyze the data and then deliver detailed reports that are easy to read on most smartphones, tablets or computers. These reports will clearly show you what you want to know about your money.

No Substitute for Face-to-Face

But, unless we regularly sit down and talk eye-to-eye about all this data, the information may not be of much use or of much comfort to you. Everyone’s lives are forever changing — maybe it is a job or career change, your family or your marital situation, big purchases like houses or an investment opportunity arise, planning for retirement, and the big ones — health care and estate planning. We can all make smarter decisions by modeling hypothetical outcomes of financial choices and the long-term outcomes may very well be closer to what you want.

The economy is forever changing as are the harvests of investments. It’s important that we get your unique situation right, and without your ongoing input that’s a pretty difficult task. I suggest everyone re-commit to attending regular meetings with us to talk about your accounts, tell us your concerns and adapt to the new data aggregation tools. Then we can use our new understandings and experience to set your financial goals and invest accordingly.

Call us and make an appointment to review, let us hear about what’s on your mind. It’s your money and it’s important to communicate regularly. We prefer to review in person, but if that’s not convenient we can show you how to use the internet to share information and have a proper conversation.

Philanthropy: What do you want your legacy to say about you?

I’ve been thinking a lot lately about philanthropy and its role in our financial planning practice. As more of our clients begin to contemplate retirement and estate tax planning, the questions that always arise are, do we have enough money to retire? How do we pass what’s left to our heirs? And sometimes, what are our philanthropic goals?

Often what is missed are the numerous planning opportunities available to benefit charity, create a current income flow, and reduce potential inheritance tax while we are alive.

Generational Wealth Transfer

Some of the more common generational wealth transfer techniques are to create a trust during your lifetime. These trusts are usually funded with appreciated assets being transferred to the trust. The trust sells the property and, in these instances, avoids any income tax.  The grantor receives a current charitable income tax deduction and an income stream for life or for joint lives. Upon death, the remaining assets go to the charities you have designated. There are numerous types of trusts to facilitate this kind of planning.

Charitable Giving Reflects Your Values

For clients with heirs, the dilemma is to determine what is fair so the children and grandchildren are adequately taken care of and what should be left to charity. While some people prefer to leave their entire estate to their heirs, others believe leaving enormous sums of money to children and grandchildren can be a disservice.

Communicating Your Values

One item we would stress is to have as many of the family involved in the discussions as possible. It is critical for future generations to understand your philanthropic views so they can continue to respect your wishes. Formal family meetings, for example, may be scheduled so all the generations can have an understanding of what’s at stake, as well as getting to know the key family advisors: attorney, accountant and wealth manager. This gives the opportunity for parents to encourage giving without imposing their ideas on their children.

Immediate Tax Planning

For more immediate income tax planning, consider bunching deductions in one year and taking the standard deduction in the alternate year. This is especially beneficial in light of the significant increase to the standard deduction passed into law in the new tax bill effective 2018. This can partially be achieved by making donations to donor-advised funds. A donor-advised fund can be established by most custodians as well as community foundations. The amount contributed to the fund is allowed as a charitable deduction in the year contributed. The funds can be distributed in the current or future years to the respective charities at your direction, thus satisfying your tax planning and philanthropic goals.

Please call us to schedule an appointment to discuss any of your charitable questions.

Retiring Abroad, Not as Simple as Waving Goodbye

As a frequent watcher of House Hunters International, I ponder what retirement would be like in a foreign exotic/low-cost destination. As is usually the case there are many items to consider before taking such a bold step. Here are some items to consider. 

Satisfying Uncle Sam 

As a U.S. citizen or permanent resident, you are required to continue to file a U.S. tax return. Certain income may be excluded if you are a “Bona Fide Resident” or meet the “physical presence test” of a foreign country. BUT you are still required to file a tax return and report foreign bank accounts.

Managing Medicare

Medicare typically does not cover medical care you receive outside of the U.S. You will need to determine what is available in your new country of residence. In addition, a Medevac policy may be advisable. Not only is this an additional cost to consider, but don’t give up on paying for monthly Medicare Part B, because paying the premium to keep Part B when abroad will ensure that Medicare will cover your care whenever you travel to the U.S. Additionally you will not face premium penalties or gaps in coverage. If you fail to pay for Part B while abroad, when you move back to the U.S. you may go months without health coverage. This is because you may have to wait until the General Enrollment Period (GEP), which runs January 1st through March 31st each year, with coverage starting July 1st.

Securing Social Security Benefits

Benefits can be transferred to retiree’s bank account thanks to advances in technology. This is available in most countries, but there are some exceptions. Make sure your new country of residence is not a restricted jurisdiction.

Housing Hurdles

Before buying real estate make sure you work with honest, knowledgeable professional as there are sometimes restrictions on what foreigners can buy and what if any financing is available.

Keep Your Investments Here

The U.S. financial and banking system is regarded as the safest and most reliable in the world. We would strongly advise keeping your assets invested in the U.S.A., avoiding major currency fluctuations and arranging for funds to be electronically transferred to your new domicile. This will ensure your funds are not subject to exchange rate fluctuations and political upheaval.

Bon Voyage!

A Note to Our Clients About Trading Activity

I wanted to bring your attention to the most recent activity in your investment accounts. We are generating trades in the fixed-income portion to move money from a strategy that is not doing as well as we expect.

As you know, the economy has been sluggish for years and the Federal Reserve had a policy of low-interest rates to encourage growth. The economy is now growing at a faster rate than before and the Fed has decided to raise interest rates to moderate growth. Whenever things change there is a period of friction and dislocation as market participants try to adjust to the new paradigm. We are finding that our active U.S. fixed managers are doing better and they see more opportunity ahead as we go through the new interest rate cycle.

The Move to U.S. Fixed Income

For several years we used Global fixed income as a key component of our strategy but the performance of that strategy has lagged for the last six to 18 months. Conversely, the performance of our U.S. fixed income has performed up to and above our expectations, therefore we are closing out the Global fixed income and repositioning that money to the performing funds.

Fixed income is an important piece of the investment portfolio because it can preserve principal, generate income and provide stability. We want to encourage our investors to stay invested in stocks for the long term because you can make more money in stocks while you have the relative safety of the fixed income.

We encourage you to review your accounts through the Snow Creek Web portal and call us with any questions or concerns.

Once again, thank you for your trust and confidence.

Is Pessimism Good for Investors?

The emotions of investors are subject to change and at times those sentiment changes can be contrary to market signals. For example, investors may be optimistic about the market or a stock and may continue to buy, thinking that prices will continue to push higher. But, often stock prices pull back leaving the overly optimistic investor with a loss.

Or, an investor may be overly pessimistic and think stocks are perpetually going down and keep her money under the mattress waiting for the perfect investment opportunity. Often, though, when pessimism is at its most extreme stocks lift off their lows and the pessimistic investor misses out.

When market strategists put both sentiment extremes into statistical perspective, we can see that there is a positive correlation between extreme pessimism and potential future gains. There is also a positive correlation between excessive optimism and future declines. Sentiment is not a perfect indicator, it is just one of many variables to consider when you are choosing your portfolio.

Unwarranted Pessimism?

In today’s market environment, renewed volatility, Trump tirades, inflation, a focus on the Fed interest rate hikes, and trade war talk have shifted the focus away from the ongoing global economic expansion and the favorable earnings outlook. Pessimism is at an extreme and the appetite for risk seems low. However, extreme pessimism is not supported by deteriorating fundamentals (job losses, consumer spending down, or a decline in corporate earnings).

The outlook will be clearer as the corporate reporting season is about to begin, and earnings expectations are optimistic. It would not be surprising to get an upward move in the markets when the attention shifts back to earnings and global growth.

Patience, Please

Stock market volatility had been missing for all of 2017, and since it returned in February and March it has been rough on the nerves.  It takes time to make money in the market and one must try and not get too concerned with market volatility or a move of more than 1% a day. Over time these daily moves are inconsequential to our long-term goals. In my opinion, the current volatility is more consistent with a market correction in a bull market, and while the fundamentals stay intact it supports our overweight allocation to equities.

We monitor each portfolio daily, and our goal is to statistically minimize the downside risk by staying globally diversified and to be tax efficient by harvesting tax losses. We build fences around long-term cash withdrawal needs, and we plant seeds into growth as opportunity presents.  Financial planning is the base of our practice, and the real way to make money in stocks is not to get scared out of them when sentiment is at an extreme.

Do you have a financial plan that reflects your sentiment or your goals? Give us a call to schedule an appointment and we’ll keep you on the road.