Slightly Off-Center: What is the first thing you do when you wake up/start your day?

Contributed by: Center for Financial Planning, Inc.

There’s a lot you know about our team at The Center … but we’ve dug up answers to some questions you might have never thought to ask.

Drink a big glass of water –Angela Palacios

I think of 3 things I’m grateful for –Dan Boyce

Say Thank You for this day! –Gerri Harmer

Hit the snooze button for 10 more minutes –Jennifer Hackmann

Take a hot shower –Matt Trujillo

Go to the gym and workout –Matt Chope

Snuggle with my kids –Melissa Joy

Head to the coffee maker, of course! –Nancy Sechrist

Feed my dog and let him out – he is basically is the center of our household right now! –Nick Defenthaler

Cuddle with my puppies! –Melissa Parkins

3 Ways to Prepare for a Market Correction

Contributed by: Matthew E. Chope, CFP®

Markets need to correct from time to time – I believe it’s as natural as the day is long. We may even be past due. I attend a lot of conferences and lectures about everything related to finances, financial planning, investments and economics – All the fun stuff!  Well, fun to me.

Recently, I heard the presenter talk about this chart, the “S&P 500 Growth/Value index Ratio”.  He actually said the S&P 500 still has a ways to go - like 25% before it's at the same peak of 2000. My thought was: Why anyone would want to get back to the type of silliness we had in 2000? 

Three years ago I did not see excesses in the market valuations and most economic indicators were still getting better, and rightly so.  I believe today valuations are rich.

Economic Cycle in Extra Innings

Someone asked me recently what inning we’re in for this economic cycle. I responded: Probably the 13th inning! The average lifespan of a US economic cycle is 4.9 years and we are almost at our 6th year.  However, there may be time left. We could see the rest of this inning, maybe more, before a 10% downturn or more.  A 10% downturn is a very normal annual event, historically speaking. And we have not had a 10% downturn in the Dow or S&P 500 since the 3rd quarter of 2011 -- almost 3 ½ years.

3 Steps to Prepare for Volatility

At The Center, we strongly believe in a philosophy of investing, not attempting to time the market.  So I’m not here telling you this a market top.  No one is smart enough to do such a thing with any consistency and getting in and out can be more detrimental than staying put over the long haul. These are the 3 steps I suggest to my clients no matter the market cycle:

1. Make sure your long-term allocation is still appropriate

2. Double check that your time frame is correct for the investments in your portfolio

3. Review and consider your risk tolerance for those investments

If there is money you need in the next 12 months for a project or money invested for less than 5 years, discuss with your planner where to put this so that it has less volatility. In my next blog, I’ll take a look at the bigger picture and what to watch for signs of a potential downturn. 

Matthew E. Chope, CFP® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Matthew Chope, CFP® and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Big League Hits & the Importance of a Short Memory

Contributed by: Timothy Wyman, CFP®, JD

Nothing screams springtime more than baseball. For most Michigan players – baseball is practiced indoors from November thru March most years so they are itching to get outside this time of year. That was true for my son Jack and his teammates at Albion College.  The Britons made their annual pilgrimage south to play ball during spring break.  My wife Jen and I decided to go cheer the team on near Orlando, FL for four days. I know, it’s a tough job – but hey it’s all for the kids!

Fortunately the weather was quite nice – I have the sunburn to prove it as usual. Jack’s team finished 5-2 with some exciting games in both victory & defeat. Jack’s first hit came in a reserve game where he legged out a triple after hitting to the left center fence.  Later in the week he got a few starts with the varsity squad collecting his first “big league” hit up the middle. Needless to say, we were excited and proud of him.  Currently Jack is playing first base and pitching as one of the team’s closers.  I think he would agree that he played well in the field – and that he’d like to forget his first pitching outing.  Fortunately, after many years of playing baseball, he learned the importance of having a short memory and went back to the ballpark the following day to compete.

Lessons of the Game

As many of you may recall, I coached youth baseball for several years (see Jack’s 10-year-old team – he’s the first row directly in the middle).

It’s fair to say I was quite passionate about it. I found the game of baseball, at least at the youth level, to be so much more than a little white ball.  It’s a game that provides many valuable life lessons. Sometimes you succeed – sometimes you don’t.  How you handle and deal with failure is more important than how you deal with success. The little things count in baseball that the casual observer overlooks or underappreciates; move a runner, throw to the correct base, know when to take a pitch, ah I could talk about it for days!

The old MasterCard commercials sum up our experience:

Flight = $350

Condo  = $200/night

Rental car = $70/day

Seeing your kid get his first collegiate hit in person = priceless

Opening Day for the big guys will be here soon.  For me, I will be spending my time following Albion. Welcome Spring!

Timothy Wyman, CFP®, JD is the Managing Partner and Financial Planner at Center for Financial Planning, Inc. and is a contributor to national media and publications such as Forbes and The Wall Street Journal and has appeared on Good Morning America Weekend Edition and WDIV Channel 4. A leader in his profession, Tim served on the National Board of Directors for the 28,000 member Financial Planning Association™ (FPA®), mentored many CFP® practitioners and is a frequent speaker to organizations and businesses on various financial planning topics.

Part 3 – A Year of Lessons on Money Matters for Your Children & Grandchildren

Contributed by: Matthew E. Chope, CFP®

Get the big things right!  Don’t miss the forest through the trees.  Some young people can get lost in their 20s choosing to hang around the wrong crowd, not exactly sure what they believe in, ignoring facts or historical truths or getting trapped in a dead end job. I consider these 4 ideas as significant steps toward gaining greater financial security and strength in your future:

1. Know what you believe in (see more about writing a belief statement below).

2. Choose a career you’re passionate about, one that interests and excites you.

3. Keep the right company.  Surround yourself with people who help you grow and encourage your dreams and ongoing success.

4. Read the right books – understand a little about all the main areas of knowledge.

On Understanding your Beliefs 

Differentiate between truth and beliefs and know that knowledge can be found in the overlap.  Many times our beliefs can be unreasonable and sometimes unrealistic.  So, we need to have a good grounding in what is real, true, and factual vs. just belief. To help you summarize your beliefs, consider writing a belief statement. Here’s a sample:

I believe in myself, 
in the pursuit of happiness, 
the rule of law, 
and building moral wealth.

I believe I am only human, in that lies my greatest strength and my greatest weakness. 
I believe in living for and developing an abundance of good physical and mental Health. 
I believe in playing Sand Volleyball for fun, exercise, camaraderie, and as one of my dearest passions in life. 
I believe in good and honest people - who I call my friends. 
I believe in living a life well lived with meaning and intension. 
I believe in all basic freedoms and human rights 
I believe in the 7 UU principles. 
I believe that most people need to believe in fairy tales; that the harsh reality of this world is too flat, monotonous and dreary.
I believe most people are good.

On Choosing the Best Career

Many people choose careers because someone else thought it would be a good idea for you or because it’s connected to a large paycheck or it has prestige.  Instead choose a career that feeds you and your soul.  If you love what you do each and every day – it won’t feel like work and you can figure out how to make a good living from that. And if you want prestige become that best at what you do!

On Keeping the Right Company

Surround yourself with people that share your values and drive you to be the best person you can be. This can be very difficult. People can’t choose their family and many times feel trapped in long-term relationships that have been built up over their lifetime.  This is where we need to stop and reflect.  Take some time to find the new people that you want to surround yourself with.  I typically choose smarter people, selfishly always wanting to be learning from my peers or mentors.  I choose people that have similar beliefs and values, people that are auspicious! It does not mean we agree on everything and that is ok.  We find comfort in people we agree with, but  we find growth in those you don’t.   

On Finding the Right Books

When it comes to reading the right books, I suggest asking people you look up to who seem to know a lot about the big subjects of mathematics, ethics, natural sciences, human sciences, history and the arts.  Ask them how they came to know so much about these subjects and consider learning more about them over your lifetime. I like taking the approach guided by the chart below, created by international teacher of history, theory of knowledge and humanities Edwin M. Van Olst. He suggests that when you encounter what he calls Knowledge Issues, you can use the chart to identify the challenges and guide your way to greater knowing.

Any opinions are those of Matthew Chope and not necessarily those of Raymond James. 

Matthew E. Chope, CFP ® is a Partner and Financial Planner at Center for Financial Planning, Inc. Matt has been quoted in various investment professional newspapers and magazines. He is active in the community and his profession and helps local corporations and nonprofits in the areas of strategic planning and money and business management decisions. In 2012 and 2013, Matt was named to the Five Star Wealth Managers list in Detroit Hour magazine.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Slightly Off-Center: Describe yourself in three words

Contributed by: Center for Financial Planning, Inc.

There’s a lot you know about our team at The Center … but we’ve dug up answers to some questions you might have never thought to ask.

Authentic, engaged, competitive –Dan Boyce

Quirky, positive, problem-solver –Gerri Harmer

loving, outgoing and a little nuts –Jennifer Hackmann

Funny, hardworking and caring –Nick Defenthaler

3 Steps for Coping with Financial Roadblocks

Contributed by: Laurie Renchik, CFP®, MBA

Going through a divorce or changing jobs can put your life in a spin. That wasn’t in your plan, so what’s next? Getting financial facts together, especially during a significant change in life, can easily get shifted to the back burner. I see these kinds of life events as potential financial roadblocks.  When you begin navigating through a financial roadblock, all of the answers may not be clear upfront.

Undoubtedly there are options and trade-offs involved.   People worry that they lack knowledge on financial topics.  If you find yourself in a position where financial planning in that moment seems overwhelming, intimidating, or you are just plain fearful of making a mistake, I recommend starting with these three steps to simplify, organize, focus and ultimately overcome your financial roadblock:

1. Create a realistic post-financial change budget.  This could be post-retirement, post-divorce or post-career change.  Maybe you haven’t paid enough attention to what you are spending or saving. You need to take into consideration a change in income. This fundamental step will help you understand what you can or need to do.

2. Invest in yourself by putting together a snapshot of your financial health.  This is accomplished with a personal net worth statement. The formula to use is:  Assets – liabilities = net worth.  There are a number of reasons why preparing a net worth statement is a good move.  It gives you a one page reality check to use as a planning tool, you can check progress toward financial objectives and it can help you identify potential red flags like an emergency fund that has dipped too low or debt that is rising faster than anticipated.

3. Address financial decisions proactively.  Instead of guessing or letting things roll along, begin by thinking about financial goals and obligations on a timeline.  This can be as simple as prioritizing in 3 buckets.  What do I have to do now (immediate action)? What can be tackled soon (big picture prep steps)? And what can be done later (accomplished after the priorities are under control)?

You may not know all of the answers today, but this exercise will at least help simplify, organize, and address the financial issues that are weighing on your mind. If you need help navigating through a financial change due to divorce or a career move don’t hesitate to call or email me.    

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Laurie Renchik and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. 

Laurie Renchik, CFP®, MBA is a Partner and Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

Wise Words from the Women who Founded The Center

Contributed by: Laurie Renchik, CFP®, MBA

30 years ago, Marilyn Gunther and Estelle Wade, along with a select group of financial planning professionals, joined together to establish the Center for Financial Planning.  Back then financial planning was still an emerging profession. Marilyn Gunther and Estelle Wade were trailblazers who became influencers in a new, primarily male-dominated profession.  They took leadership roles in professional organizations with a commitment to strengthen the standards of financial planning practitioners and enhance the public’s understanding of the financial planning process.

Unwavering commitment to The Center values and a comprehensive financial planning foundation that were envisioned by Marilyn and Estelle in 1985 are still firmly anchored in our business today. In fact, if you visit our Founders’ conference room, you’ll find yourself surrounded by wise words from these two women:

“The art of financial planning is listening to clients with your eyes, your ears and your heart.” –Marilyn Gunther

 “From the beginning we have strived to treat every client with respect and honesty while helping them meet their short-term and long-term financial goals.” –Estelle Wade

While Marilyn and Estelle have retired, they continue to serve as role models for women at The Center.  Today, their leadership torch has been passed on to three female partners Laurie Renchik, CFP®, Sandy Adams, CFP® and Melissa Joy, CFP®.  This March, in honor of Women’s History Month, we give a special word of thanks to Marilyn and Estelle. They created our workplace, they changed our profession, and they lead the way.

Laurie Renchik, CFP®, MBA is a Partner and Senior Financial Planner at Center for Financial Planning, Inc. In addition to working with women who are in the midst of a transition (career change, receiving an inheritance, losing a life partner, divorce or remarriage), Laurie works with clients who are planning for retirement. Laurie was named to the 2013 Five Star Wealth Managers list in Detroit Hour magazine, is a member of the Leadership Oakland Alumni Association and in addition to her frequent contributions to Money Centered, she manages and is a frequent contributor to Center Connections at The Center.

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Five Star Award is based on advisor being credentialed as an investment advisory representative (IAR), a FINRA registered representative, a CPA or a licensed attorney, including education and professional designations, actively employed in the industry for five years, favorable regulatory and complaint history review, fulfillment of firm review based on internal firm standards, accepting new clients, one- and five-year client retention rates, non-institutional discretionary and/or non-discretionary client assets administered, number of client households served.

First Quarter Investment Pulse

Contributed by: Angela Palacios, CFP®

We hit the ground running this year with a flurry of meetings with top notch investment managers.  In January Angela Palacios attended the ETF.com conference where international investing was a hot topic.  Angela shares some interesting insights along with notable quotes from some of our top money managers.

Ryan Barksdale of Vanguard: Due Diligence process

Melissa and Angela sat down with Ryan to discuss how Vanguard structures their investment committee in making key decisions as well as how they evaluate a company they are looking to bring on as a partner in making investment decisions.  Ryan discussed with us their manager oversight and selection process.  The keys in their investment selection process include low cost, top talent and patience.

Giorgio Caputo a portfolio manager and analyst at First Eagle

On the global front, First Eagle’s Giorgio Caputo noted that international valuations seem to be becoming more attractive relative to the US.   And with global confidence at multi-year lows and depressed earnings, if anything goes right things would start to look attractive. US quality positions have been reaching their cash targets and they’ve been replaced with overseas holding. Caputo noted that their investors pay a tax by holding cash, high quality bonds, and golds in order to get lower risk as measured by volatility in the portfolios.

It was noteworthy that Caputo was meeting with us on January 23rd, which was the day that Mario Draghi announced new quantitative easing initiatives in Europe. Caputo mentioned that the trend has been to buy on rumor and sell on fact. This seemed to be repeated with the announcements.

Discussion turned to the global fears on deflation. Caputo noted the perplexing conundrum that worldwide labor pools are shrinking as populations age, but wage growth isn’t increasing with a tighter labor pool. He blamed this on a deflation pulse which is coming from the automation of equipment. Whereas a new factory 30 years ago might have employed 1,000 workers, today a similar factory might only employ 10 or 20 people with machines taking care of the rest.

Notable Quotes from some of our top managers shareholder letters

From Steven Romick President of FPA notes it has been rough weather for some time for deep-value investors.  However, rather than letting the market’s and its price fluctuations drive them, they remain patient, picking companies that are easy to earn a return on for the price they are paying.  They have to often sit in cash and wait for these opportunities as they are now, at least partially.

“Our money is invested alongside yours so we’re willing to look stupid for a time rather than act stupidly”

Rob Arnott Chairman and CEO of Research Affiliates notes that diversification in a bull market is always painful. 

History and common sense suggest some serious caution going forward, given a potentially toxic brew of historically high valuation levels, peak earnings, an economic expansion that’s about to enter its seventh year, the markets’ evident addiction to monetary stimulus as the primary fuel for further rallies, and the stark divergence between U.S. stocks and pretty much everything else.

Angela Palacios, CFP® is the Portfolio Manager at Center for Financial Planning, Inc. Angela specializes in Investment and Macro economic research. She is a frequent contributor to Money Centered as well asinvestment updates at The Center.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Angela Palacios and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. Raymond James is not affiliated with and does not endorse the opinions or services of Ryan Barksdale, Giogio Caputo, Steven Romick, Rob Arnott, or the companies they represent.

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Slightly Off-Center: What is the worst advice you have ever been given?

Contributed by: Center for Financial Planning, Inc.

There’s a lot you know about our team at The Center … but we’ve dug up answers to some questions you might have never thought to ask.

Anything about how to raise my child from those who have never had children –Angela Palacios

Pluck your own eyebrows –Jennifer Hackmann

To go into field or take a job that you don’t truly enjoy just for the paycheck – life is too short to not enjoy what you do every day – I’m very fortunate to wake up and know I’m in the profession I’m meant to be in –Nick Defenthaler

It’s not personal – just business. Hogwash - everything is personal. –Tim Wyman