We had a wonderful intern working with us last year here at White Raven Financial and when it was time for him to return to school, we worried how we could replace someone who had fit in so well. We had already learned that hiring into a small business is a tricky thing and we didn’t wish to have history repeat itself after doing so well with our short-term hire. Just before our intern left, Diane attended a Seattle Financial Planning Association (FPA) meeting and as fate would have it, she found herself sitting next to someone who coaches business owners/managers with their hiring process. The coach explained how she could help with the hiring of just the right person to fit in with White Raven Financial.
The task took much longer than anticipated (uh, Diane thought it would be quite short!). Goals, values and strengths had to be articulated in writing, explained during a video meeting, and then revised to provide more definition. The coach called it “painting the bus” and we had to remember that our “bus” was on a place called the Stump Farm. Finally, the day had arrived; the paint appeared dry and the hiring process could begin. The bus must have been painted a vibrant color because more people noticed the bus than we had expected. After many rounds of interviewing, the phrase that resonated with Diane was written as such: “I wish to work for a firm that puts their clients’ interests first”. And thus, we’d like to introduce White Raven Financial’s newest team member, Brett Lathrup, CFP®. You can learn more about Brett by viewing White Raven Financial’s About page. As to why Brett chose to join White Raven Financial, he says that the idea of working for a small, fee-only firm that focuses on fiduciary relationships with their clients – highlights socially responsible values – and a beautiful office setting made the decision easy.
Now while we don’t see the Federal Reserve doing any painting, they did bring in exciting, colorful news regarding when and if they would hold steady or cut rates. On July 31, 2019, the issue of interest rates was resolved as the Fed decided to implement a 0.25% rate cut. Even though Fed Chair Jerome Powell noted that the jobs market is healthy, he also commented on increased business debt and that manufacturing has weakened, in part because of trade policy. Toward the end-of-June, USA Today published a blog on what a potential rate cut would mean to savers and borrowers. Basically, if you are saving, don’t expect to earn as much in interest as you did the past year. And for the borrowers, the big winners are those who have variable rate loans as you ‘should’ see a small decrease in your payment. As we are still early in the third quarter, reporting for companies are the other headlines we have been reading. Toward the end of July, Fact Set numbers are showing that corporate profits are still showing strong earnings with many showing better-than-expected results. Alliance Bernstein Advisor Insights also commented on continued strong returns across the board in the second quarter. But, we are showing some downside in the economy. On July 1st, the Institute of Supply Management Index declined to 51.2%, which continues a slow, steady decrease for the fourth straight month and corroborates the view that business activity has softened. (Levels higher than 50 signal expansion; levels below 50 signal contraction.)
And while domestically we are lowering rates, Blackrock in their July 29th Global Weekly Commentary reported on the European Central Bank’s decision to keep interest rates unchanged. In their blog, they discussed the improving financial conditions in the Eurozone and how they feel the Eurozone has steadied its growth outlook. There is a lot of uncertainty in trade global growth due to the current tariff situation. Russel Investments, in their 2019 Global Market Update – Q3 Outlook, wrote that they feel that a U.S.-China trade-war ceasefire could set the scene for a rebound in the global economy later in the year. Meanwhile, here at White Raven Financial, we are recommending that investors’ portfolios should be set up to both participate and defend in the current market environment by having appropriate exposure to equities, bonds, and some alternatives that is suitable to your risk tolerance and time horizon.
The markets appeared to languish in the summer sun for the month of July with very small waves of volatility. The blue-chip barometer (the Dow)* did a slow beach walk and showed a 1.0% gain. The S&P 500 (SPY)* strolled the beach and came in with a 1.3% gain for the month. The tech-rich Nasdaq Composite (COMPTR)* decided on a small jog past it’s brothers and finished July with a 2.1% gain. (*After linking, click on Quarterly & Monthly Total Returns, “Monthly” tab.) On Tuesday, July 30th, 2019, the Dow Jones Indices released the latest S&P CoreLogic Case-Shiller report; the report showed that home price increases are continuing to slow. The 20-city composite Home Price Index in May reported a 2.4% annual gain; down 0.1% from the unrevised 2.5% posted the previous month. Before seasonal adjustments, month-over-month data had the month of May posting a 0.6% increase over the prior month of April for the 20-city composite index.
Regards and Thank you,
The Team at White Raven Financial
*Indexes are unmanaged and do not reflect service fees, commissions, or taxes. You cannot invest directly in an index. Past performance is not necessarily indicative of future results. Return for the DOW, S&P500 and the NASDAQ is the total return (price only) provided by Morning star Inc. as of 2019June30. Diversification and asset allocation do not assure or guarantee better performance and cannot eliminate the risk of investment loss.
*The Standard and Poor’s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility, and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with dividends reinvested and is not available for direct investment.
*The Dow Jones Industrial Average covers 30 blue chip U.S. companies selected by the editors of the Wall Street Journal. The Dow represents about 25% of the NYSE market capitalization and less than 2% of NYSE issues.
*The NASDAQ is a market-value weighted index that measures all NASDAQ domestic and foreign common stocks.
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