The Trust & Estate portion of the financial plan is often the most difficult, however, provides the most peace of mind. At Samra Wealth Management, we believe that asking tough questions, such as “How much is your business worth should you die?” and “Have you and your spouse talked about remarrying should one of you pass”, provides our clients with confidence in their financial plans.
A tumultuous month plagued with political conflict, escalated threats of a trade war, and talks of increased regulatory scrutiny on big tech firms. Combined with another cabinet reshuffle and scandal effecting the Trump administration, has given the media more ammunition, making one thing clear: President Trump does not play well with others. Although the voting public may question; “does the President still have the best people working for him”, as there has been recent skepticism, whether anyone qualified for a cabinet position would want it, given the cabinets record of late. There is no denying the Trump administration’s actions have led to record volatility, causing the heads of strategy at the largest brokerage firms, relaying messages of reassurance through their financial advisors to their clients. This month’s issue of The Samra Report focuses on the Trump administrations actions as they affect investment portfolios, the changing dynamic of municipal bonds and the search for high-quality/high-yield income, and the potential long-term benefit of President Trump’s policies.
At Samra Wealth Management, we are redefining what it means to be a conservative investor. Recommending against US Government bonds, and strongly recommending against the use of annuities until the end of 2018. Questions conservative investors should be asking themselves:
· Why invest in US Fixed-Income (bonds), during what we believe to be a rising interest rate environment? (Supported by 3 Fed Rate hikes in 2017, and Fed Chair Jerome Powell’s hints towards 4 hikes in 2018. Increases in interest rates lead to a devaluation of a fixed income portfolio.)
· Although annuities offer fixed rate, or a margin of safety. Why lock into an annuity product, when we have strong reasons to believe interest rate hikes during 2018 will cause these same annuity products to offer higher returns at year-end?
· Has your financial advisor provided you with a “shock analysis”, an analysis showing the interest-rate risk of your portfolio? Essentially, quantifying for the investor how an increase in interest rates would negatively impact the value of a fixed-income portfolio.
· What alternative investments do you have as part of your portfolio, and how do they mitigate downside exposure?
As global financial markets continue on a similar trajectory in line with prior months, the bull market shows little sign of losing momentum. Earnings continue to beat analyst expectations, and increased consumer confidence and market sentiment has households less worried about saving, as consumption and investment pick-up. At Samra Wealth Management, we believe there are select opportunities remaining in 2018, however, investors who are recently coming off the sidelines, should remain cautious.
With the S&P 500, Dow and Nasdaq reaching all-time highs in 2017, a restructured tax plan combined with heightened investor sentiment, has investors who have remained in cash since the financial crisis coming off the sidelines with riskier appetites, in search of higher yields. Although economic indicators point towards continued global expansion, investors should remain cautious. Geopolitical risk, and advancements in technology leading to lower dependence on human capital, could be cause for concern.
In the early 2000’s, Americans had come accustom to paying $400 for a desktop computer, and had little foresight that they were assisting in the fall of the US Economy. With higher disposable incomes, in a consumer driven economy, consumers, retailers and financial organizations found themselves over-leveraged, creating a perfect storm scenario. With the recession now in the rear-view mirror, investors find themselves experiencing pre-recessionary déjà vu. Not only are investors coming off of the sidelines and playing catch-up with risky investments, more firms are streamlining operations looking to replace costly human capital. This month’s edition of The Samra Report focuses on off-shoring and outsourcing, technology replacing human capital, and how to prepare your portfolio against the next market shock.
Eight years into a bull market, investors who have remained in cash since the financial crisis are coming off the sidelines and entering the financial markets; prompting concerns from financial professionals. This month’s issues of The Samra Report covers: digital currency, the blockchain revolution and the future of cryptocurrency.
The world of finance, is a lot like the world of medicine: An infinite number of variables, countless areas of expertise, and immeasurable opinions from both professional and novice sources. With the recent barrage of hurricanes leaving 16.5 million Americans without power, this issue of The Samra Report focuses on the weather and your portfolio.
The general practice amongst financial advisors, is for the advisor to assess their client’s risk profile and allocate assets amongst off-the-shelf investment vehicles. This flawed practice illustrates a strong disconnect between the financial advisor, the client’s tax advisor and the client’s enthusiasm towards reaching their financial goals. This month’s issue of The Samra Report highlights the widely unknown area of impact investing, contrasting the benefits against charitable donations, and our preference of allocation with regards to geographic location and sector.
In February of this year, Warren Buffet, slammed Wall Streets’ active managers, while praising passive investment pioneers such as Jack Bogle, founder of The Vanguard Group. This month’s issue of The Samra Report explains: how Warren Buffett’s remarks were taken out of context, how to beat the S&P 500, and provides insight from Benjamin Graham, Warren Buffet’s mentor, professor and widely known as the father of value investing.