Monthly Archives: October 2018

Valley National News

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We are pleased to announce that our Head of Invesments, Connor Darrell, has obtained his Chartered Financial Analyst® (CFA) designation, and has been promoted to Assistant Vice President.

The CFA is regarded by most to be the highest distinction for investment professionals, especially in the areas of research and portfolio management. The CFA program consists of three exams encompassing a “candidate body of knowledge” (CBOK) that the CFA Institute believes is necessary for those in the investment profession. In addition to passing these tests in succession, CFA candidates must accrue four years of professional experience.

“Obtaining the CFA designation is a huge investment in time – with candidates spending upward of 300 hours a year for a period of three to four years,” says Valley National’s CEO, Matthew Petrozelli. “Connor’s commitment to this intensive endeavor while continuing to excel in his full-time work for our team and our clients makes all of us extremely proud.”

Connor joined Valley National Financial Advisors in 2014 as an Associate through the firm’s Entry-Level Professional (ELP) program. He is originally from Cream Ridge, New Jersey, and moved to Bethlehem after he graduated from Gettysburg College with a degree in Economics.

As Assistant Vice President, Head of Investments Connor will continue to provide investment analysis and assist VNFA’s advisory teams with portfolio strategy and asset allocation. in addition to contributing market analysis and insights to The Weekly Commentary e-mail newsletter.

GET TO KNOW CONNOR

VNFA In The Community

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Each year our team pledges to donate gift boxes for the Volunteer Center of the Lehigh Valley that will be distributed to local children for the holidays.

This year, we would like to invite you (our clients and friends with whom we share this Lehigh Valley community) to participate by helping us create Holiday Hope Chests!

Read more about this program and contact us, or visit our Bethlehem office, if you are interested in participating. We will release more details and in weeks to come!

The Numbers & “Heat Map”

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THE NUMBERS

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 confidence is near all time highs with recent tax reform providing further support. We are anticipating a strong holiday shopping season.

FED POLICIES

C-

In September, the Federal Reserve raised interest rates for the third time this year. 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. Q3 earnings season is now underway, and the results reported thus far suggest a continuation of that trend.

EMPLOYMENT

A+

The US economy added 134,000 new jobs in September and the unemployment rate ticked down to 3.7%; the lowest level since 1969. 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.

The Markets This Week

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by Connor Darrell CFA, Assistant Vice President – Head of Investments
Equity markets endured another week of losses, with both the Nasdaq and S&P 500 entering correction territory (a correction is a technical term describing a decline of more than 10% from previous highs). International stocks continued their slide as well.

As is typical during periods of market stress, bonds generated positive returns as investors sought refuge from the volatility. Economic data released during the week suggested that rising interest rates may be impacting home buying decisions, as completed home sales declined meaningfully.

Volatility is Normal Around Mid Term Elections
After several quiet months, volatility has returned with a vengeance in October. We recently released a note that delineated some of the risks that have been blamed for the selloff, including rising interest rates, trade and tariffs, and geopolitics. We continue to believe that none of these issues are likely to fully derail the bull market, and further contend that the volatility we have experienced in recent weeks is normal for a mid-term election year. In fact, dating all the way back to the FDR administration, markets have averaged an intra year decline of 17% during mid-term election years, only to recover meaningfully over the following 12 months. Decades of market history have taught us that timing the markets is nearly impossible, and that selling too early could be just as detrimental as selling too late. The aura of uncertainty created around mid-term elections makes that endeavor even more difficult and given the strength of the underlying fundamentals that drive markets, maintaining a disciplined approach remains the most prudent course of action. Read our October Market Volatility Note

“Your Financial Choices”

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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 wrap up her Estate Planning Month series with a discussion about Bringing the Estate Plan Together.

RELATED VIDEOS: 5-Step Approach to Estate Planning

Estate Planning Series Introduction WATCH NOW

Step 1: Identifying Goals WATCH NOW

*NEW* Step 2: Asset Inventory WATCH NOW

COMING SOON – Step 3: Considering Heirs

Subscribe to our YouTube channel to get notifications when the next videos in this series become available.

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.

Valley National News

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We’re Moving! Our New Jersey office is relocating on November 1, 2018.

Currently at 825 Belvidere Road, our team is moving just a little more than a mile away to 420 Coventry Drive, Phillipsburg, NJ 08865. Our entire firm is excited about the new space, and we look forward to welcoming you to visit us.

Click here for directions from our existing New Jersey office address to the new office location.

Regular office hours at this location will remain Mondays and Fridays from 8 a.m. to 4 p.m. and Wednesdays from noon to 4 p.m. The New Jersey service team is available from our Bethlehem headquarters on Tuesdays, Thursdays and Wednesday mornings. If you would like to make an appointment, please call 908-454-1000.

The Numbers & “Heat Map”

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THE NUMBERS

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-

In September, the Federal Reserve raised interest rates for the third time this year. 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. Q3 earnings season is now underway, and the results reported thus far suggest a continuation of that trend.

EMPLOYMENT

A+

The US economy added 134,000 new jobs in September and the unemployment rate ticked down to 3.7%; the lowest level since 1969. 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.

Did You Know…?

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Senior Vice President Laurie A. Siebert CPA, CFP®, AEP® authored an article for the Pennsylvania Institute of Certified Public Accountants (PICPA) CPA Now Blog regarding Unclaimed and Abandoned U.S. Savings Bonds for PA residents.

A recent notice to Pennsylvania residents regarding U.S. savings bonds appeared in local publications. The alert informed bond owners of a suit Pennsylvania was filing to take title to abandoned, unclaimed, and matured savings bonds. READ THE FULL ARTICLE