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The Year for Sound Planning

January 16, 2017

Dear Reader,

I am reaching out to you in this blog letter because I care about you.  It’s not just business. 

There is a lot of information, disinformation and misinformation out there about financial matters.  A lot of sales people are hyping various products that are supposed to solve problems.  Many make claims that are not substantiated by facts and/or audited figures. 

I submit to you that the biggest issue we all face is wise planning.  Someone once said… 

“Failure to plan is tantamount to planning to fail.” 

I agree.  First let me talk a bit about the past year and why many have a poor understanding of what happened and why expectations for many were not met and why reactions to disappointment could expose you to significant financial mistakes. 

I recently wrote an article published exclusively in Seeking Alpha Pro.  It will be available to all readers in early February.  (If you want to read a wide variety of articles on investing and markets, I encourage you to visit the Seeking Alpha site.)  A few introductory points were these: 

 

·         The “Trump Rally” has taken markets to all-time highs.  But the rally is somewhat less than it might appear.  If you did not own the top 3-5 stocks of the Dow Jones Industrial Index, you made much less and only a third actually did much better than the average from the election through December.  The broader larger stock market gained only a bit more than half what the DOW did and even those gains were mostly weighted toward a minority of stocks.  Small company stocks performed the best.

·         Index returns are not representative of most investor portfolios.  For good reason most investors are diversified and are invested according to personal objectives, and direct comparison to any one index is not appropriate.  If you are diversified among sectors, including international, and balanced with bonds and cash, it would be unrealistic to have achieved double-digit returns in 2016.  A “balanced” portfolio having 1/3 intermediate bonds, short term bonds and cash along with 2/3 invested broadly in large, small and international stocks might have returned, after expenses, 3-7% in 2016 depending on weighting.

·         PE Ratios and other valuation measures are historically high.  Can business growth increase enough to support current valuations?

·         The current bull market is a bit long in the tooth at almost 8 years and the second longest in modern history.  Only the 1987-1999 was longer.

·         There are positive factors that could keep the market going up, especially if the Trump administration emphatically moves to enact its business-friendly and middle class relief agenda items.  Such could stimulate a continued market upturn.

·         But we think risks outweigh rewards.  Risk Management and sound financial planning are likely to be the key to success going forward.

With that as brief background, here are my questions for you: 

1.      Is your cash flow (budget) under control?

2.      Are you on the right career path?

3.      If you are not retired, are you saving and investing enough every month to meet your needs in retirement?  Do you know how much you will need?  Do you know how much you need to save and invest and what return you will need to make to reach your goals?

4.      Have you even defined your goals?  What do you want to accomplish with the rest of your life? 

5.      If you are in retirement, are your income-producing assets allocated in a manner that meets income needs, walls in risks, and gives you a reasonable probability that you will not outlive your money?

6.      Do you have…

a.       A list of defined objectives?  Personal, business, family, ministry and charity?

b.      A strategy to control cash flow and minimize taxes?

c.       A coordinated plan to take care of risks, including investment and assets, health, disability, property, auto, liability, business, family, and death?

d.      A realistic investment plan that fits your own objectives?

e.       An understanding of financial products that allows you to make wise decisions independent of sales people?

f.       An estate strategy, including best forms of ownership, beneficiaries, wills, and trusts as are beneficial to you and your heirs?

g.       In other words an overall financial plan based on sound principles and timeless wisdom?

If these questions create any concerns or questions of your own, I encourage you to give us a call.  We will offer you a free, no obligation review of your situation. 

Sincerely yours,

 

J. Andre Weisbrod

 

STAAR Financial Advisors,   STAAR Investment Trust,    Strategic Assets Fund 1, LP

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If you need help managing your personal or business economic trends, we are here for you.  Call 412-367-9076 to set up a no-cost, no-obligation consultation in person or by phone.  STAAR Financial Advisors, Inc. offers wealth creation, management and utilization opportunities for people, families, businesses and organizations at all stages of life.  We provide planning, business consulting and investment management, including private equity opportunities for accredited investors.

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J. André Weisbrod is founder of STAAR Financial Advisors Inc. and the STAAR Investment Trust headquartered in Pittsburgh, PA. He has been named a 5-star Wealth Manager in Pittsburgh Magazine and is among the longest tenured fund managers with over 20 years managing the same funds. He is also co-founder of the Strategic Assets Fund 1, LP, a private equity fund for accredited investors. He is an author and speaker and has been interviewed, quoted or had articles published in a variety of media including Investors Business Daily, TheStreet.com, The Wall Street Journal, Business News Network, the Pittsburgh Post-Gazette, USA Today, KDKA TV and Reuters TV.

Actively involved in church and community affairs, Mr. Weisbrod is committed to the well being of individuals, families and businesses. Avocations include competitive masters swimming, scuba diving, painting and photography, acting and music.

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