Monthly Articles

Interest Rates

There have been many headlines in the news recently about rising interest rates.  Rates on personal loans, credit cards, and homes are all on the rise.  In this article we’re going to discuss why interest rates fluctuate, what causes them to change, and the effect it has on investments and the economy.

Interest rates fluctuate for a few different reasons.  Supply and demand affect interest rates substantially; the more demand there is for money, the more banks and other lenders can charge for loans, and vice versa.  The Federal Reserve (the central bank of the United States) also influences rates by adjusting the discount rate, the rate at which it loans money on a short-term basis to eligible banks for the purpose of shoring up inadequate liquidity {1}.  Adjustments to the discount rate tends to have a cascading effect on other interest rates.

The Federal Reserve uses its power over the discount rate as a lever to attempt to drive the economy in one direction or another.  A typical symptom of decreased economic activity is lower loan activity as businesses and private parties begin to develop a pessimistic outlook regarding their prospects.  Decreased investment activity means fewer new business developments, leading to fewer jobs and decreased output.  To help stimulate loan activity, the Fed lowers the discount rate, enabling lending institutions to offer loans at lower rates while still turning a profit.  Lower rates in turn attract businesses and individuals who otherwise would have sat on the sidelines, but instead choose to invest in their businesses.

Fig. 1 {3}

As the economy began to slip into recession in 2007, the Fed began to lower the discount rate from 6.25% in June 2007 to 0.5% in January 2009.  This had the intended effect of softening the economic downturn; many feel that the actions that the Fed and other government bodies took during that time helped avoid a depression.  The discount rates remained steady at 0.75% for nearly five years from February 2010 through November 2015 (Fig. 1).  During this time, the Fed hesitated to raise rates for fear of stifling economic growth.  In the past couple of years, the Fed has concluded that the economy is strong enough to withstand rate hikes, and has consequently raised the discount rate to keep a lid on inflation as it has inched toward 2% annually (a figure that many economists feel is healthy).

An area that is very pertinent to investors is the relationship between the discount rate and bond rates.  In the 70’s, and 80’s, one could expect to earn 8% – 15% per year on their money virtually risk free by investing in government bonds (Fig. 2).  Today, the 10-year Treasury note yields just 2.96%; the days of funding retirement needs with bond interest appear to be behind us.  The reason the rates are so

 Fig. 2 {4}

different is because the Fed has drastically lowered the discount rate since the 70’s and 80’s which has caused Treasury note yields to decrease as well (notice the similarity between figures 1 & 2).  A challenge the investor faces when considering bonds as an investment is interest rate risk, which describes the fact that as interest rates rise, bond values tend to fall.   Because interest rates are rising and yields generally remain low, bonds have been a relatively unattractive investment vehicle in the past few years.  At J.R. Young, P.C., we continue to prefer stocks as an investment choice; although stocks carry higher risk than bonds, they offer a potential return that meaningfully outpaces inflation.


  1. “Board of Governors of the Federal Reserve System.” FRB: IFDP Notes: The Effects of Demographic Change on GDP Growth in OECD Economies, Board of Governors of the Federal Reserve System (U.S.),
  1. “Bonds and Interest Rates.” Certified Private Wealth Advisor (CPWA) |, 29 Mar. 2018,
  1. “Interest Rates, Discount Rate for United States.” FRED, Federal Reserve Bank of St. Louis, 1 June 2017,
  1. “United States Government Bond 10Y | 1912-2018 | Data | Chart | Calendar.” Haiti Exports | 2008-2018 | Data | Chart | Calendar | Forecast | News,

May 2018

Written by Blake Bitz, Investment Advisor Representative

April 2018 Market & Economic Update

When we published our economic outlook at the beginning of 2018, the markets were experiencing an unprecedented period of positive, orderly trade and ballooning stock valuations.  In the back half of January, the markets began to shift into a far more volatile pattern, and since then, the markets have declined more than 12%.  Fundamentally, financial markets reflect human nature.  Market movements are the numerical representation of confidence and uncertainty, fear and greed in action.  Historically, the market has oscillated between periods of relatively low volatility to periods of high volatility (Figure 1). {1}  It is not surprising then to see a period of volatility emerge in the markets after such a long period of orderly trade.  There are a number of factors contributing to the uncertainty and fear that investors are experiencing, as well as clouding the economic outlook.

Figure 1


Trade policy has become a hot button issue as of late, as the Trump administration has pushed for tariffs on aluminum and steel imports to the United States, as well as a proposal for a further set of tariffs on Chinese goods totaling $50 billion worth annually.  On April 2nd, China responded by imposing tariffs on 128 American goods, totaling $3 billion worth of annual exports, with promises to match further US tariffs. {2}  The market response has been unequivocally negative.   The vast majority of economists oppose tariffs in general; decades of data have shown that tariffs not only have a negative effect on the economy against which tariffs are imposed, but also to the economy levying the tariffs.  One economy is often hurt disproportionately, but in general, both economies suffer.  For those interested in a nicely presented, concise overview of tariffs and their effects, check out the article in citation 3. {3}

The Domestic Economy

US economic metrics continue to show strength.  The unemployment rate has remained steady for the past six months at a historically low 4.1%. {4} The housing market remains a quagmire.  The US Department of Housing and Urban Development’s most recent report is a mixed bag, stating that construction on single-family and multi-family homes is on the rise, home purchases and supply for both categories were up, while existing home supply reached a record monthly low.  Home values continue to increase at a rapid annual rate of 6 to 7 percent on average across the nation. {5}  Overall, indicators show that the economy remains on sound footing and is projected to continue to expand over at least the next couple of years.

Monetary Policy

US monetary policy is becoming somewhat more hawkish than it has been in the last few years.  After years of rock-bottom interest rates, the Federal Reserve is periodically raising interest rates in an effort to keep a lid on inflation, as well as provide for the possibility of lowering them again at some point in the future as a way to stimulate the economy if necessary. {6}  The market reaction has been mixed, as investors struggle to collectively decide whether interest rate hikes are a net benefit to the economy.

Market Outlook

It appears that market volatility is here to stay in the near term.  Recent actions taken by the Trump administration regarding trade policy, Federal Reserve policy, and economic indicators (particularly the housing market) give investors reason to vacillate.  On the other hand, we still do not anticipate a catastrophic market drop in the near term; the economy remains strong, and the recent tax cut legislation promises to be a catalyst for corporate earnings increases.  Equity valuations are looking more reasonable than they have in many months, and we think that value investors will step in to cushion potential large selloffs.  In this market environment, we at JR Young PC continue to watch client holdings closely and search diligently for prudent investment opportunities.



In-text: (McKinsey & Company, 2018)

McKinsey & Company. (2018). The long and the short of stock-market volatility. [online] Available at: [Accessed 6 Apr. 2018].


In-text: (Mullen, 2018)

Mullen, J. (2018). Trump threatens China with new $100 billion tariff plan. [online] CNNMoney. Available at:

[Accessed 6 Apr. 2018].


In-text: (, 2018) (2018). [online] Available at: [Accessed 6 Apr. 2018].


In-text: (, 2018) (2018). Employment Situation Summary. [online] Available at: [Accessed 6 Apr. 2018].


In-text: (, 2018)

Your Bibliography: (2018). [online] Available at: [Accessed 6 Apr. 2018].


In-text: (Harrison, 2018)

Harrison, D. (2018). Powell Says Fed’s Gradual Rate Increases Should Keep Economy Strong. [online] WSJ. Available at: [Accessed 6 Apr. 2018].

April 2018

Written by Blake Bitz, Investment Advisor Representative


Over the past few years, and especially over the past year, there has been an enormous swell in public interest surrounding cryptocurrencies.  Many watched the values of these mysterious assets skyrocket in value relative to traditional currencies.  Seeing no end in sight to the rise, individuals “invested” in cryptocurrencies blindly without really knowing what they were getting themselves into.  In the past few weeks, the values of many cryptocurrencies have moderated, and many of these investors have lost untold amounts of money as a result.  My goal in this article is to remove the mystery surrounding cryptocurrencies and answer the question that relates to our clients: do they represent a prudent investment?

What are Cryptocurrencies?

Cryptocurrencies are assets, just like traditional currencies, houses, boats, and cars, among many others.  Like traditional currencies, they are used as a medium of exchange, but they differ from other types of currencies in that they are completely digital and decentralized, not subject to the regulation of any individual, social or political body, or nation state (1).  There are two factors that give a currency value in a marketplace. The first is scarcity of the currency; there must be a finite amount that can be independently verified as authentic.  The second factor is merchant’s willingness to accept it as a form of payment in exchange for goods and services.

Each cryptocurrency accomplishes the first objective through a system that defines whether and under what circumstances new units can be created. Quantities of cryptocurrencies are limited and secured through cryptography, a set of protocols designed to accomplish the objectives of integrity, authentication, and confidentiality in a digital medium (2).  The second objective has been accomplished organically over the past few years as more and more merchants, first online, and then traditional brick and mortar establishments, have chosen to accept various cryptocurrencies as forms of payment.

Cryptocurrencies accomplish a third objective that other currencies do not, namely, decentralization and anonymity.  Each system allows transactions in which the units’ ownership can change and can be determined cryptographically (3).  Cryptocurrency transactions are tracked on a blockchain, which is essentially a public transaction ledger detailing the movement and current ownership of any particular unit of cryptocurrency.


Bitcoin was the first cryptocurrency to come on the scene, introduced in 2009 by an anonymous person or group of people calling themselves Satoshi Nakamoto.  Satoshi Nakamoto introduced the first reference implementation and blockchain database as part of Bitcoin’s release.  Since then, the number of cryptocurrencies has expanded to over 1,300 as of March 2018, most implementing very similar systems to Bitcoin.

Are Cryptocurrencies a Prudent Investment?

In our view, cryptocurrencies are not currently a great investment choice for a number of reasons.  The very things that have contributed to their sharp rally and subsequent decline, namely emotions and thinly traded markets, are good reasons to stay away.  Unlike stock and currency markets around the world, markets for cryptocurrencies are not centrally regulated or heavily traded.  The fewer players there are in a market, the more likely it is that emotion can drive that market in one direction or another.  Any rumor or piece of news surrounding cryptocurrencies can send their values swinging wildly in either direction.  Lack of government oversight lends a degree of uncertainty and complicates the process of researching valuations, as reliable data can be scarce.

Some of these problems are beginning to be addressed, such as government oversight of cryptocurrency markets (much to the chagrin of cryptocurrency proponents), and expanded markets with greater liquidity as more and more individuals participate in buying and selling cryptocurrencies.  Still, it is fair to say that the majority of market participants know far too little about the true valuation of cryptocurrencies, or methods to go about analyzing valuations, so we expect emotions to continue to be the main drivers of value movements in the near term.



  1. Cryptocurrencies: A Brief Thematic Review Archived 2017-12-25 at the Wayback Machine. Economics of Networks Journal. Social Science Research Network (SSRN). Date accessed 28 august 2017
  2. Menezes, A. J.; van Oorschot, P. C.; Vanstone, S. A. Handbook of Applied Cryptography. ISBN 0-8493-8523-7. Archived from the original on 7 March 2005.
  3. Lansky, Jan (January 2018). “Possible State Approaches to Cryptocurrencies”. Journal of Systems Integration. 9/1: 19–31. doi:10.20470/jsi.v9i1.335 (inactive 2018-02-13).

March 2018

Written by Blake Bitz, Investment Advisor Representative

2018 International Economic Outlook

The international economic picture in 2016 was marked by tumult in Europe as ‘Brexit’ rocked the continent, growth slowed in China, and central banks deployed every tool in their arsenal to try to spur their economies in the face of sluggish growth.  2017 proved to be calmer economic waters.  The Organization for Economic Cooperation and Development (OECD), an organization that tracks the economic developments in 45 countries, showed that all 45 economies grew in 2017, and 33 of those 45 grew at a faster pace than in 2016.  That marks the largest number of nations with accelerating economic expansion since 2010.

Stock markets around the world responded positively to the broad-based international economic expansion in 2017, with international small-cap equities leading the way, growing by 30%.  Unlike in the US, where stock market gains have outpaced corporate earnings growth, international equities have grown at a more tempered pace.  Despite strong gains in 2017, there appears to be additional room for growth in 2018 as international company valuations remain quite attractive.

Central bank policy continues to be a focus in both Europe and Asia.  The European Central bank plans to purchase $30 billion in assets per month through September 2018, down from $60 billion per month.  This signals that the ECB believes that their economy is gaining footing and needs less assistance than in 2017.  Japan will continue its quantitative easing efforts in 2018 as well.

Two of the world’s largest emerging economies, India and China, are displaying promising economic signs for 2018.  All else being equal, investors feel more confident investing in nations with stable political environments than not, and both nations are benefitting from a more reliable economic outlook thanks to consolidation in political power.

India’s Prime Minister, Narenda Modi, has overseen massive economic reforms over the past couple of years.  India’s economy has been historically difficult to track because many of the nation’s financial transactions were made with cash, and were not reported and taxed properly.  in 2016, Modi boldly demonetized the 500 and 1000 rupee notes typically used in cash transactions.  In 2017, he implemented a value-added tax.  These changes have led to far more transactions taking place in the regulated economy, and more fair and efficient taxation.

China will likely continue to experience a slower economic expansion than in the past, but growth drivers are changing rapidly.  The world’s largest economy continues to move from a closed, goods-based economy focused on metals, energy, and chemicals, to one that is open to foreign investors and export-heavy.  New focus in technology and renewable energy promise to be long-term growth drivers.

International stock market returns have significantly lagged US returns since the financial crisis in 2008, but with US stock market valuations continuing to climb, international equities could prove to be an attractive place to look for growth.  Increased transparency in financial markets, central banks’ measured use of quantitative easing, and reasonable investment valuations are all ingredients that point to a solid 2018 in international markets.

January 2018

Written by Blake Bitz, Investment Advisor Representative

A Brief Economic Overview


With the markets skyrocketing to all-time highs, many are wondering if gains can be sustained, and if the US economy can support this elevated market environment. The good news is that the economy appears to be on sound footing.  Unemployment is at its lowest rate in nearly two decades, wages are rising, U.S. companies are raking in record profits, and housing prices continue to rise.


Consumer Confidence

US consumers who are optimistic and confident in their own economic outlook are vital in revving up the overall US economic engine.  Spending drives our economy, and the more goods and services that people purchase, the better the results are for businesses.  Flourishing businesses raise wages and hire new workers as their demand increases.  As wages rise and unemployment falls, folks become more optimistic and tend to spend more, perpetuating the cycle.  At the end of October, Bloomberg reported that consumer confidence is at a 17-year high, and as a result, folks are increasing spending.



A big contributor to the high consumer confidence levels is the U.S. unemployment rate, which currently sits at 4.1%.  This is a rate not seen since February 2001, and a level that economists consider to be ‘full employment’.  In addition to low unemployment, wages are rising at about 2.5% year-over-year as businesses pay to retain key talent.  That wage growth number is rather low, and indicates that the economy still has some room to grow; when wage growth reaches high levels, it can indicate over-enthusiasm in the economy, which can ultimately lead to negative turnarounds.


The Housing Market

The housing market continues to face a situation in which there is extremely low supply, but high demand.  In this environment, housing prices have risen dramatically in the last couple of years.  A large chunk of that demand is coming from millennials eager to transition from renting to homeownership.  The government has encouraged this trend by offering programs that allow first-time home buyers to purchase homes with little down and low interest rates.  With inventory at such low levels, however, few are successful in closing on a home, and those that do are forced to agree to loans that are higher than they might have hoped.  This trend may persist for some time, as folks remain wary of putting their house on the market when they are unsure they will be able to buy another somewhere else.  Additionally, homebuilders are neglecting the lower end of the market in favor of building high-value homes that bring them higher margins.



The Market

What does all of this mean for the stock market? The S&P 500 is currently trading at a 25.3 P/E ratio, a historically high number*.  Market gains have been driven by enthusiasm about the strong economy, and the promise of reduced government regulation as well as the potential for lower corporate tax rates.  There is a correlation between market value and market returns in the following year; while it is difficult to accurately predict returns, the expectation is low to moderate returns in the best case scenario, and a downturn in the worst case scenario, with the median expectation being negligible to small returns.  Given that the economy is strong, consumer confidence is high, and companies are expected to post positive returns next year, we don’t anticipate an exceptionally large selloff.  More likely, market performance will be lethargic.


Beginning in January 2018, we will begin to publish monthly articles, and plan to provide quarterly coffee lectures to give clients and community members the opportunity to join us for in-depth presentations on a variety of investment topics.  Stay tuned for more information!



*Check out the past articles “What is a Company Worth?” and “What is Fundamental Analysis?” for more information on P/E ratios and other valuation metrics. 

December 2017

Written by Blake Bitz, Investment Advisor Representative

Protecting Your Finances

Building a bright financial future and a comfortable retirement requires a mixture of hard work, diligent saving, prudent investing, and planning for the unexpected.  Another important, but sometimes neglected factor, is protecting your information.  In 2012, the Bureau of Justice Statistics (BJS) released a report that found that identity theft cost Americans $24.7 billion in that year alone.  To put that number in perspective, the total losses for burglary, vehicle theft, and property theft in 2012 totaled just $14 billion.

The threats of identity and financial theft are only growing larger.  Because big paydays await for hackers behind the sophisticated encryption in things like bitcoin, more sophisticated hacking techniques have arisen.  All of that hard work building a nest egg could be for naught if your information is compromised and someone is able to access and steal your money.  Here are a few simple steps you can take to keep your financial information more protected.

Keep your Physical Documents Locked Up

Financial documents and other records that contain personal and account information should always be locked up in a safe place at home.  In addition, consider limiting the sensitive information you carry with you when you’re out and about.  Shred receipts, credit card offers, and any other mail that contains information that someone could use to steal your identity.

Guard Your Personal Information Online

A common method that thieves use to steal sensitive information is to impersonate a reputable person or business with whom the victim has had prior contact.  Never respond to a request for personal information over the phone, through the mail, or online unless you are sure that the party requesting the information is reputable.  Often, scammers will email requests to victims from an email address that appears almost identical to that of the legitimate business, and are capable of sending mail and making phone calls to victims that look and sound quite convincing.

In general, businesses to which you have previously given personal information should not lose it; additional requests for personal information should be extremely rare and you should be wary of such requests.  Be especially wary of requests for full social security numbers, as that is the most valuable piece of personal information one can steal from you.  If a business asks for your social security number for verification purposes, they will often only need the last 4 digits.

A good practice is to go to the official website of the business or person asking for information and find the number for their customer service department.  A quick phone call to double check a legitimate request for information could save you both money and time.

“Shred” Your Unneeded Digital Personal Information

Just as it is good practice to shred unneeded physical documents containing personal information, it is also good practice to do so digitally.  Before you dispose of or sell old computers and smartphones, use a wipe utility program to completely overwrite the hard drive where information is stored.  Delete old credit cards and bank account information from websites from which you no longer purchase items.

Encrypt Online Data

A lock icon appears next to web addresses that scramble your information as it is sent to and from you and the website.  This makes it very difficult for hackers to intercept your information as it is being sent.  It is strongly advised that you do not enter and submit personal or financial information on websites that do not have the lock icon next to their web addresses.

Taking these steps will go a long way in keeping your private and sensitive information out of the wrong hands, and will help protect the nest egg you are building for your future.

September 2017

Written by Blake Bitz, Investment Advisor Representative

What is a Company Worth?

Last quarter, we explored the broad definition of fundamental analysis, and how perhaps the most successful investor of a generation, Warren Buffett, amassed a fortune using this technique.  In this article, we’ll look at the ways in which fundamental analysis is used to determine a company’s value that we can then use to make informed investment decisions.

What determines a company’s value?  The truth is, it is very difficult to determine a company’s exact value, which is why investment opportunities arise in the first place.  If everyone knew exactly what a company was worth, and exactly what it would be worth in the future, the company’s stock would trade at that exact price at all times, and no money could be made.  Our goal is to get a close estimate, and then look for any large discrepancies between the value we calculate and the company’s stock price.

In the simplest terms, a company’s underlying value can be described by its book value.  Book value is defined as the amount of money per share that an investor would receive if the company shut its doors today, liquidated all assets, paid all debts, and then distributed the difference to shareholders.  Occasionally, we will find companies whose stock prices are trading below book value.  As long as there isn’t something fundamentally wrong with the company, these can be good investment opportunities since we would expect that in the long run, the stock will at least return to the value that a shareholder would receive if the company ceased operations.

There are other factors in the value equation, and this often leads to stocks trading well above book value.  Things that add value to company are safety of the investment, earnings growth, industry competition, scalability, etc.  A large component of a company’s value is its financial health.  A company that has ample assets and reasonable debt levels provides confidence that it is prepared to withstand a potential downturn in its industry, and shows that the company is in a position to make strategic acquisitions that can make them competitive in an ever-changing business environment.  It is valuable to have reasonable assurance that a company you own will not go bankrupt if the economy or its industry experiences a downturn.  For this reason, on average, companies that are safer investments command higher stock prices.

A company’s earnings are another extremely important part of the value equation.  With a healthy balance sheet already in place, a company can increase its value by turning a profit each year.  A positive net income is the lifeblood of any company, and it is what allows a company to grow and expand, to meet its debt obligations, and to invest in its future success through research and development and upgrades in infrastructure.

Earnings are used in a key valuation metric that every fundamental analyst uses: the price-to-earnings ratio (P/E).  This is calculated by dividing the company’s stock price by the company’s earnings-per-share over the past year.  In general, lower P/E ratios indicate better value, and if a company’s P/E is lower than its historical average, it can indicate a good investment opportunity because we expect that the stock will return to the average P/E in the long run.  P/E is reduced when either the company’s stock price declines, earnings increase, or both.

Sometimes a company’s P/E is at or above historical averages, but we expect earnings growth in the coming year.  Is this a good investment scenario?  We can quantify this situation with what is called the forward P/E ratio, or the P/E we expect the company to have one year from now if the stock price were to remain the same.  Forward P/E can be calculated with projected earnings that companies often report in their annual reports.  If the forward P/E is lower than the historical average P/E, it can indicate a good investment opportunity.

There are many valuation metrics that fundamental analysts use to determine a company’s value, such as price-to-sales, price-to-cash flow, return on investment, etc.  They all serve to create a full picture of a company’s value that allows us to make informed investment decisions.  A fundamental analyst is searching for companies whose stock price has taken a hit, but has a solid balance sheet, is projected to achieve increased earnings in the coming year or years, and has valuation metrics that are currently below historical averages.  If all of these fall into place, it is very likely that a good investment opportunity has been found.  At JR Young, we are continually searching for these kinds of investment opportunities in order to build portfolios full of companies that have good growth potential.

June 2017

Written by Blake Bitz, Investment Advisor Representative

What is Fundamental Analysis?

Performing thorough analysis of various investments is important to build a portfolio that minimizes risk, while maximizing potential profit.  Different members of the investment community will give you different answers when you ask them what distinguishes a good investment from a bad one, but most fall into one of three camps: those who use fundamental analysis (trying to measure a company’s intrinsic value), those who use technical analysis (analyzing stock chart patterns for entry and exit signals), and those who use a mixture of the two.

Investors utilizing each of these three schools of thought have amassed tremendous fortunes, but perhaps one of the wealthiest and most famous investors of our day, Warren Buffet, favors fundamental analysis and uses it almost exclusively.  If one of the wealthiest people in the world favors a certain investment analysis tool, it probably pays to familiarize ourselves with it!

Fundamental analysis is defined as a method of evaluating a security in an attempt to measure its intrinsic value, by examining related economic, financial, and other qualitative and quantitative factors (Investopedia).  The underlying idea is that as rational beings, we will pay more money for things of greater value, and less money for things of lesser value.  Fundamental analysis attempts to reveal the value or predicted future value of a given company so that investors have an idea of how much they should be willing to pay to own that investment.  In the short term, a company’s share price often bounces around in an erratic fashion, sometimes becoming cheap and sometimes expensive relative to the company’s true value.  In the long run, however, a company’s stock price and true value tend to move in lockstep.  If a company’s stock price is less than the value determined through fundamental analysis, it is probably a good buy, because in the long run we would expect the share price to return to parity with the company’s true value.

Warren Buffett amassed, and continues to grow his fortune on this principle, the most famous example being his investment in Coca Cola.  The stock market crashed in 1987, and many stocks prices slid to levels well below the underlying company’s true value.  Buffett recognized that although the company’s stock was struggling, Coca Cola remained incredibly strong with excellent financial health, strong earnings, global reach, and little competition.  In 1988, Buffett purchased more than $1 billion of Coca Cola, and over the next 27 years, it grew to more than $16 billion.  He recognized that Coca Cola was incredibly undervalued and took advantage.

At JR Young, we have taken Warren Buffet’s lead, and use fundamental analysis as the cornerstone of our analysis strategy.  We believe that it is a sound investment philosophy that has served investors well over many years.  In the next article coming June 1st, we will look at some of the ways we perform this analysis, and how we determine a company’s value.  Stay tuned and feel free to contact us to suggest topics for future articles!

March 2017

Written by Blake Bitz, Investment Advisor Representative

Three Things You Can Do To Become Financially Fit in 2017

For many, the start to a new year brings with it a great opportunity to resolve to improve our health and fitness.   A new year can be a great opportunity to evaluate and improve our financial ‘fitness’ as well.  Whether just beginning your career, or planning to soon retire, there are many simple strategies that you can implement to make sure that you are reaching your financial goals.  Here are three to get you started:

  1. Let Your Employer Do the Heavy Lifting

How great would it be if for every push-up you performed, you received the health benefits of two push-ups? This exists in the financial world in the form of Employer 401(k) matching programs.  A great majority of employers offer some form of these plans, which usually involve the employer committing to match some percentage of the employee’s salary contribution to a retirement savings account.  Nearly 8 in 10 workers take advantage of these programs, but 1 in 4 of those are missing out on the full company match by not saving enough.  Among these employees, on average, $1,336 is left on the table each year, or an estimated $24 billion all together.  Committing to take full advantage of your employer matching program can mean potentially hundreds of thousands of extra dollars in your retirement account over the course of your career.

  1. A Diverse Portfolio is a Strong Portfolio

Just as it is important to perform a variety of exercises to strengthen the entire body, it is important to own a variety of different investments to have a strong portfolio that will stand up to unpredictable market movements.  It is difficult to accurately predict which parts of the economy will perform well in a given year, so it is important to own investments that benefit from different sectors of the economy.  Making sure your portfolio is properly diversified helps to minimize the risks of investing, while maximizing the chance that your long-term financial goals can be safely reached.

  1. Consistency is Key

We all know that staying consistent with a diet and exercise program brings success.  The same is true with investing; those who choose long-term investments and stick with them through the ups and downs of the market tend to reap greater returns than those who try to buy and sell frequently.  A recent MorningStar study found that investors who tried to “time” the market during the downturn and rebound of 2008 and 2009 experienced on average a 1.4% point lower return than the market average; that means that, on average, those who stayed the course during the market downturn did better than those who sold and repurchased their investments.

If you are seeking advice regarding your financial situation, feel free to give us a call at J.R. Young P.C. at (541) 484-1211.

February 1, 2017

Written by Blake Bitz

Published in the March 2017 edition of North Gilham Living magazine, pg 22