Congratulations to our Assistant Vice President, Finance & Accounting Elizabeth Wilson, CPA! She was honored yesterday by the Pennsylvania Institute of CPAs (PICPA) with a 2018 Young Leader Award.
This program recognizes PICPA members under the age of 40 who demonstrate an extraordinary commitment to the accounting profession through their active involvement in the PICPA and community activities. Elizabeth and the other 2018 award recipients were recognized at the PICPA Leadership Conference and featured in the Fall 2018 issues of the Pennsylvania CPA Journal.
Elizabeth joined the Valley National team in 2014 as Corporate Controller. Today she is part of the executive leadership and tax management teams in addition to overseeing all the corporate accounting and planning for the Valley National Group of companies.
THANK YOU To everyone who supported our VNFA Team’s participation in the Community Bike Works SPIN-a-thon!
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
US ECONOMIC HEAT MAP
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
A+
Consumer spending is expected to remain healthy as individuals with lower tax rates spend their windfalls.
FED POLICIES
C-
The Federal Reserve will meet this week and is widely expected to increase short-term interest rates. Rising interest rates tend to reduce economic growth potential and can lead to repricing of income producing assets.
BUSINESS PROFITABILITY
A
Factset is reporting a blended earnings growth rate of 20% YoY for the 2nd quarter of 2018. Tax reform has played a major role, but the strength of the US consumer is boosting corporate profits as well. We will get our first glimpse of Q3 earnings in just a couple short weeks.
EMPLOYMENT
A+
The US economy added 201,000 new jobs in August and the unemployment rate remained below 4%. Additionally, weekly jobless claims fell to their lowest level in over 50 years last week. The job market remains very healthy.
INFLATION
B
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.
OTHER CONCERNS
INTERNATIONAL RISKS
5
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.
by Mae Gerhart, Tax / Financial Planning Professional Investment and charity scams occur often after a natural disaster. In the aftermath of Hurricane Florence, it is important that well-meaning individuals looking to support the relief effort do some due diligence. Before you make an investment or charitable contribution, you should verify that the opportunity is legitimate and that your money is going to have the desired result.
FINRA provided a warning last week with some details about how to avoid investment scams promising huge gains around stocks associated with clean-up, rebuilding, and breakthroughs in science and technology that purport to address current and future flood-related issues. They may pressure you to invest and reaching out to you directly. Do your research even if they have a familiar sounding or respectable name. Read the alert here.
Charity scams follow similar tactics and tend to stick around longer. In these cases, the money you may intend to benefit the charitable cause, can end up being used for other purposes. In 2012, a watchdog group found that one charity failed to spend $56 million it had raised on actual services and instead spent nearly all of it on marketing costs.
Sites like GoFundMe or YouCaring provide crowdfunding for various causes, many of which are not registered charities. These sites also collect fees from a percentage of your contributions – sometimes upward of 10% or more – to support their business model.
By researching various charities through charity rating sites such as give.org, charitywatch.org, or guidestar.org, you will be able to look at individual charity’s most recent reports and ratings. These sites can show you how much of your actual contribution will go towards the end goal versus how much will be used for administration expenses.
Finally, keep in mind, that due to the Tax Cuts and Jobs Act of 2017, not everyone will receive a tax benefit from making a charitable donation. Advance tax planning with your financial advisor will help you figure out if the donations you desire to give also aligns with your financial plans.
“Real heroes are [people] who fall and fail and are flawed but win out I the end because they’ve stayed true to their ideals and beliefs and commitments.”– Kevin Costner
by Connor Darrell, Head of Investments U.S. large cap stocks reached new all-time highs last week as both the Dow Jones Industrial Average and the S&P 500 managed to climb above their January peaks. Financial stocks led the way due to an increase in longer-term bond yields, which bodes well for bank margins. It was also a nice bounce back week for international stocks, with both developed and emerging markets equities climbing well over 2%.
Bonds produced modestly negative returns as the yield curve steepened considerably. The yield on a 10-year U.S. Treasury bond now stands at 3.07%, and the Federal Reserve is widely expected to increase interest rates following its meeting this Wednesday. Bond yields could continue creeping higher depending on Chairman Jerome Powell’s post meeting comments on future policy decisions.
Watching Only the S&P 500 Doesn’t Provide a Complete Picture The S&P 500 is up more than 11% in 2018, climbing higher as a result of a healthy economic backdrop. However, after leading the way in what was a strong 2017 global equity market, foreign markets have struggled to keep pace in 2018. Emerging markets have been troubled by a strong dollar and some major uncertainty in some regions (Brazil, Argentina, and Turkey have been the main culprits), and developed markets have also struggled as economic growth has cooled in Europe.
Investors who (prudently) own a broadly diversified global portfolio may feel somewhat disappointed in their returns thus far this year, especially if they are using the S&P 500 as their benchmark (which we don’t recommend). But it is good to remember why diversification is so important, especially as U.S. equity markets are near all-time highs. An allocation to international stocks was additive to returns in 2017, and while that leadership was short-lived, it is impossible to predict when the pendulum will swing back the other way again. We don’t know when the next crisis will occur, but we can be virtually certain that it will eventually happen. As investors, the best thing we can do is own a variety of uncorrelated assets with positive expected return over our investment horizon.
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 a “New – 2018 self-employed business deduction.”
Laurie will take your calls on this or other topics at 610-758-8810 during the live show, or via yourfinancialchoices.com. Recordings of past shows are available to listen or download at both yourfinancialchoices.com and wdiy.org.
As many of our clients already know, Senior Vice President Frank Stettner, CPA, CFP® and his team based in Valley National’s New Jersey office spend time in both our Phillipsburg location and our Bethlehem headquarters. Moving forward they will be scheduling regular weekly hours at both locations for consistency and the convenience of our clients. If you would like to have a meeting at our Phillipsburg location, please schedule in advance with your service team as the office will be closed to walk-in visitors on Tuesdays & Thursdays, and Wednesday mornings. Calls and other correspondence will be automatically re-routed to our Bethlehem office on those days during office hours.
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
US ECONOMIC HEAT MAP
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
A+
Consumer spending is expected to remain healthy as individuals with lower tax rates spend their windfalls.
FED POLICIES
C-
The Federal Reserve held pat following its most recent meeting, but it remains probable that two more rate hikes will be implemented before year-end. Rising interest rates tend to reduce economic growth potential and can lead to repricing of income producing assets.
BUSINESS PROFITABILITY
A
Factset is reporting a blended earnings growth rate of 20% YoY for the 2nd quarter of 2018. Tax reform has played a major role, but the strength of the US consumer is boosting corporate profits as well. 80% of US companies have reported positive EPS surprises (meaning actual earnings were higher than forecasts).
EMPLOYMENT
A+
The US economy added 201,000 new jobs in August and the unemployment rate remained below 4%. The job market remains very healthy.
INFLATION
B
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.
OTHER CONCERNS
INTERNATIONAL RISKS
5
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.
Starting on September 21, 2018 the Federal Trade Commission (FTC) will be putting a new credit file protection layers in place that will allow consumers to contact any of the three major credit reporting agencies and request a freeze on their credit files free or charge.
The Economic Growth, Regulatory Relief, and Consumer Protection Act stipulates that the reporting agencies – Equifax, Experian, and TransUnion – have until the next business day to put the requested freeze in place. Consumers can also request to lift that freeze at any time and the agencies will have to comply within an hour.
To fully freeze your credit, you must do so with all three credit reporting agencies. When freezing your credit, you will create a pin or passcode. Should you unfreeze your credit report, you will need that pin or passcode to prove your identity.
Congratulations to our Assistant Vice President, Finance & Accounting Elizabeth Wilson, CPA! She was honored yesterday by the Pennsylvania Institute of CPAs (PICPA) with a 2018 Young Leader Award.
