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Third Quarter 2017

The Markets

As fall officially begins, the markets have continued an upward trend. This is likely due to beginning discussions of tax reform. In general, lower corporate tax rates will likely be beneficial to both large and small businesses. Improving economic data and earning expectations abroad, as well as a weaker dollar have boosted international stocks, especially emerging markets, so far this year. Both have had a very positive year and have performed better than the S&P 500. However, double-digit returns across the board have been the norm. The Federal Reserve has been more specific about inching interest rates up this year and next year as well as reducing their balance sheet - both signaling upward pressure on interest rates. The bond market has not reacted much to this announcement, but we do think prices on longer-term bonds will likely come under pressure as these trends continue.

It would have been hard to predict such upward momentum when so many seemingly impactful things have been happening. The markets have shrugged off the devastating hurricanes in Houston, Puerto Rico and Florida as well as continued rhetoric with North Korea. Like some of you, I know many that were affected by the hurricanes. You may be interested to know that Raymond James headquarters, based in St. Petersburg, Florida, was closed for several days as a precaution and to allow their employees time to recover or return if they evacuated. They opened their doors for evacuees as the building itself was not damaged and they have large gathering spaces. Raymond James has two backup locations: one in Southfield, Michigan and one in Denver, Colorado. There were no noticeable disruptions. You never want to have to test backups, but are glad when they work as intended. Maybe living in Michigan is not such a bad thing! I may complain less this winter about snow and cold.

Updates on Equifax

Recently, we sent a letter with information on how to access Equifax to determine whether you have been affected. As a follow-up, you may want to lock access to any new credit, for the time being, until they determine how this is going to be addressed in the future. You can find the link to Equifax to make that happen here**. On October 4, there was also a good article*** in The New York Times that had a lot of FAQ’s all in one place. If you have not checked your status with Equifax, I would suggest you do that.

In addition, shredding all of your documents that have personal information on them is very important. Protecting personal information and your identity are very important in today’s world. Our office offers a free shredding bin available for your use. It is locked, and our shredding service comes once a month to shred the contents of the bin on sight. You may stop at our office at any time during business hours to place paperwork in our shredder. We welcome you to take advantage of this free and valuable service.


Tax Reform

Details on tax reform for corporations and individuals are not spelled out yet. If it is passed, we would expect a favorable reaction in the markets. Zero estate taxes would also have broad implications as well. Until we know the details, we will not speculate as it will be an unpredictable process. It does appear that many of the deductions will go away and tax brackets will be reduced. However, those items will be the things that are negotiated to arrive at a final bill.


We want to thank those of you who received our survey and returned it. We had a very high response rate. We also received many great ideas and suggestions that we can implement, as well as better understand what our clients value and what they would like to see. Congratulations to Kristy Gordley, who won our prize for filling out and returning our survey. She donated the proceeds to Mott Children’s Hospital.

You will continue to hear from us as we develop and add to our capabilities. It is very rewarding to get such positive feedback and so many responses. We will not slow our push for progress, but use them as a basis for continued improvement. Feel free to offer suggestions at any time. We are always happy to hear from you.

Resource Center

This section is to present helpful apps that can help you stay connected and make life easier, as well as some books or materials that address some of the challenges that we all face today as investors.

Getting groceries is as easy as ever with the Instacart app. Delivered to your door in as little as one hour the Instacart app allows you to shop online from stores such as Whole Foods, Meijer, Kroger, Costco and more.

This quarter and last many of our staff are attending conferences on topics such as portfolio management, financial planning and more sophisticated technology tools. Technology is improving more quickly. We are excited to be able to improve how we work with you and to get you better information in the way you want it delivered.

As we enter the fourth quarter of the year, we are encouraged that performance is exceeding expectations so far. As the markets increase, managing risk should be an important component of the overall process. That is easy to forget as markets seem to reward only risk taking.

Happy Fall.

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 Morningstar Commodities Broad Basket Category is a composite of returns of all funds in this category. The MSCI EAFE is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the United States & Canada. The EAFE consists of the country indices of 21 developed nations. The Barclays US Aggregate Index is an unmanaged market value weighted performance benchmark for investment-grade fixed rate debt issues, including government, corporate, asset backed, mortgage backed securities with a maturity of at least 1 year.

Financial Market Update* Year-to-date change as of September 30, 2017
S&P 500 Index 14.24%
Morningstar Commodities
Broad Basket Category -2.01%
MSCI EAFE US$ (International) 19.96%
Barclay US Aggregate Bond 3.14%

*Indexes are for illustrative purposes only. One cannot invest directly in any index. Assumes dividends are reinvested.
Source: Morningstar

Past performance may not be indicative of future results. Expressions of opinions are as of this date and are subject to change without notice. Any opinions are those of Sherri Stephens and not necessarily those of RJFS or Raymond James. Stephens Wealth Management Group is independent of RJFS.

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and investors may incur a profit or a loss regardless of strategy selected.

Diversification and asset allocation do not ensure a profit or guarantee against a loss. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. You should discuss any tax or legal matters with the appropriate professional.

Dividends are not guaranteed and must be authorized by the company’s board of directors. Investments mentioned may not be suitable for all investors. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters.

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