Heads Up!

by Thomas M. Riddle, CPA, CFP®, Founder & Chairman of the Board

We spend a lot of time with clients planning for living in retirement and the eventual transfer of wealth. When your plan involves multiple generations, it is important to arm adult children and grandchildren (and in some cases, parents and grandparents) with appropriate financial knowledge.

Does that mean you have to lift the curtain on all the details of your personal financial life? No.

But a well-timed family meeting with your Financial Advisor can bring generations together to understand your goals and values, outline expectations and responsibilities, establish good financial habits early, and know who to turn to for help with individual or family financial questions.

Talk to your family about their financial choices. We can help get the conversation started by structuring and leading a meeting for you to discuss finances with your family. For convenience, we can host by video or teleconference. Also, your advisor may have available evening or weekend appointments – just ask us!

Valley National News

The Weekly Commentary has been undergoing some upgrades! Hopefully you have noticed the new look, and the collection of new contributors from our talented team. Next week, you will receive the newsletter from Valley National Financial Advisors at a new e-mail address: FromOurTeam@valleynationalgroup.com.

Please make sure to include this e-mail in your contacts so that our communication doesn’t get bounced or trashed as spam. If you miss the newsletter on June 19th, e-mail us so we can help correct delivery settings for the future. Also, if you have feedback to share with us about the newsletter format, content or delivery method, please send inquiries to this new e-mail address.

Who “lives” at that address? Rest assured that your e-mail is sent to a real person on our team. Judianne Harris, Assistant Vice President, Marketing works directly with your advisory teams here and she will share anything you send back to us with the folks on your service team.

Finally, do you know someone else who might want to receive The Weekly Commentary? Have them shoot an e-mail to FromOurTeam@valleynatoinalgroup.com to be added to our list.


The Numbers & “Heat Map”


Sources: Index Returns: Morningstar Workstation. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. Three, five and ten year returns are annualized excluding dividends. Interest Rates: Federal Reserve, Freddie Mac

The health of the US economy is a key driver of long-term returns in the stock market. Below, we grade 5 key economic conditions that we believe are of particular importance to investors.



Consumer spending is expected to remain healthy as individuals with lower tax rates spend their windfalls.



The Federal Reserve is widely expected to implement its second rate hike of 2018 this week, and markets are anticipating further hikes before year-end. Rising interest rates tend to reduce economic growth potential and can lead to repricing of income producing assets.



Q1 Earnings were very strong, with US companies reporting YoY earnings growth of 25%.



The unemployment rate has dropped below 4% for the first time since 2000. Additionally, there are over 6 million unfilled job openings throughout the economy; close to an all-time record.



Inflation is often a sign of “tightening” in the economy, and can be a signal that growth is peaking. The inflation rate remains benign at this time, but we see the potential for an increase moving forward. This metric deserves our attention.




The above ratings assume no international crisis. On a scale of 1 to 10 with 10 being the highest level of crisis, we rate these international risks collectively as a 5. These risks deserve our ongoing attention.

The “Heat Map” is a subjective analysis based upon metrics that VNFA’s investment committee believes are important to financial markets and the economy. The “Heat Map” is designed for informational purposes only and is not intended for use as a basis for investment decisions.

Did You Know…? PRO TIP

by Joseph F. Goldfeder, CFP®, Assistant Vice President
Looking to buy a home? How do you know if you’re getting the best rate?

If you’re planning on buying a home soon, one of the most important steps is obtaining a mortgage. It is probably one of the first things you should check off your list. Too often, eager home buyers neglect to search for the best rate possible. Many avoid comparing lenders and go with the first option they can find, which could end up costing borrowers more in the long run. There are many factors that go into your rate that you can’t control, but there are also some ways for you to ensure that you’re getting the best rate possible. Let’s review.

Credit Score
One major piece that you can control when it comes to getting the best rate, is ensuring that your credit score is in good shape. Lenders use your credit score to predict how reliable you will be in paying off your loan. The general rule of thumb is the higher your credit score, the lower the interest rate. If you’re looking into purchasing a home, be sure to look into your credit score ASAP and take action if needed. There are many providers such as Credit Karma, which will offer your credit scores for free.

Loan Type and Term
When you begin exploring mortgage options, you should keep in mind that the type of loan you choose may have an effect on your rate. Typically, adjustable-rate mortgages have a lower interest rate than fixed-rate mortgages. Adjustable-rate mortgage loans have an interest rate that will “adjust” periodically. They are traditionally structured to change every year after an initial period of remaining fixed. Fixed-rate loans are just that, fixed for term of the loan. Loan term is another big factor. Typically, shorter-term loans have lower rates and lower costs, but higher monthly payments. It is important to weigh all aspects of your loan; type, term, and rate before making a decision.

Down Payment
Another factor in your rate is your down payment. Under normal circumstances, the higher your down payment is, the lower your rate will be. This is why people typically like to build a strong savings before they look into buying a home. Usually, 20 percent or more for a down payment can keep you at a lower rate. If your down payment is lower than 20 percent, you face the possibility of a higher interest rate.

“Your Financial Choices”

The show airs on WDIY Wednesday evenings, from 6-7 p.m. The show is hosted by Valley National’s Laurie Siebert CPA, CFP®, AEP®. This week Laurie will discuss:

“Family financial conversations – how and what to discuss.”

Laurie will take your calls on this or other topics. This show will be broadcast at the regular time WDIY is broadcast on FM 88.1 for reception in most of the Lehigh Valley; and, it is broadcast on FM 93.9 in the Easton and Phillipsburg area– or listen to it online from anywhere on the internet. For more information, including how to listen to the show online, check the show’s website www.yourfinancialchoices.com and visit www.wdiy.org. 

The Markets This Week

by Connor Darrell, Head of Investments
The S&P 500 managed to rally last week (posting a 1.66% gain), but markets have had limited time to digest the further escalation in trade rhetoric coming from the G7 summit in Quebec (which ended on Saturday). President Trump’s continued focus on economic protectionism has caused consternation among major trade partners, and the risk remains that significant changes to trade policy could hinder long term global economic growth.

The week of June 11th is likely to bring multiple events that have the potential to significantly impact financial markets, including monetary policy meetings in the US, Europe, and Japan, in addition to the historic summit between the U.S. and North Korea on Tuesday in Singapore. We will do our best to break down the important takeaways in next week’s update.

We continue to emphasize to clients that in the long run, markets are driven by the underlying economic environment and growth in corporate earnings. That backdrop remains quite favorable at this time. As investors, we need to be aware of how politics and policy impact our portfolios, but barring a major change to the forward outlook, the long-term strategy should remain largely in place.