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Advisers warn against fleeing stocks in favor of bonds
Author: Jeff Benjamin
Date: Sept 13, 2018
Publication: Investment News
Link to Article

Flight to quality overlooks the risks to fixed income that come with rising interest rates

Investors continue to favor fixed-income strategies over equities, which is contrary to what most financial advisers consider prudent at this point in the market cycle and suggests investors are anxious.

The latest data from show that more than half of the $4.2 billion that moved into U.S.-listed ETFs in the week ended last Thursday went into bond strategies.

Three of the five most popular ETF strategies last week were bond funds. The $34.5 billion iShares iBoxx Investment Grade Corporate Bond ETF (LQD) had more than $756 million in net inflows last week.

Meanwhile, the biggest outflows, totaling $2.1 billion, were from the $271 billion SPDR S&P 500 ETF (SPY).

"Interest rates are going up, so investors are heading into fixed income?" quipped Tim Holsworth, president of AHP Financial Services.

"We are, and have been, minimizing our fixed-income holdings for the past several years," Mr. Holsworth said.

The Investment Company Institute, whose data combine flows into mutual funds and ETFs, also shows a steady trend of investors fleeing equities and migrating toward the perceived safety of bonds. For the week ended last Wednesday, ICI reported $5.5 billion worth of equity-fund outflows, which includes $7 billion of outflows from domestic equity funds and $1.4 billion of inflows into world equity funds.

Bond funds, meanwhile, saw $3.5 billion worth of inflows during the week.

Todd Rosenbluth, director of mutual fund and ETF research at CRFA, is not surprised by the pattern of money moving out of stocks and into bonds because he thinks investors are more focused on stock market levels than they are on the effect of rising interest rates on bonds.

"Demand for fixed income has been strong in 2018 as investors have favored low-cost investment-grade securities," he said. "As the equity markets become more elevated, a rotation toward more stable strategies is appropriate."

With the S&P 500 up more than 10% from the start of the year, and up more than 325% since the March 2009 market low, it's not surprising that investors are starting to show signs of caution.

But the general trend in asset flows suggests investors might be missing the risk that's building on the bond side, according to Paul Schatz, president of Heritage Capital.

"It's counterintuitive," Mr. Schatz said. "The next crisis for retirees is going to be their loss of principal in the bond market."

Mr. Schatz said the 35-year bull market for bonds is over, citing the July 2016 bottom in 10-year and 30-year Treasury securities, and he expects to see moderately rising interest rates, which drives down the value of bonds, over the next couple of decades.

"The average retiree buying bond market indexes will be in for a world of hurt," he said. "In this environment right now, people should look at limited-duration bond funds as well as the less aggressive floating-rate bond funds. You've got a better economy that is accelerating, and in that environment, those two types of bond funds will do better."

Kashif Ahmed, president of American Private Wealth, agrees that exiting equities is a mistake that could come back to haunt investors.

"What this may be saying is that some investors may be succumbing to the narrative that the markets may be nearing a top, or that the headline risk is more of a threat than others believe," he said. "If investors are heading for the exits and piling into fixed income and still have plenty more life left in which they will need their money not to lose its purchasing power, then they are doing themselves a disservice."

10 years later, advisers still shudder recalling the financial crisis
Author: Jeff Benjamin
Date: Sept 17, 2018
Publication: Investment News
Link to Article

Historic chain of market events left advisers and investors more skeptical, cautious

When the 2008 financial crisis is documented by historians and market watchers, it's often pegged to Lehman Brothers' record-setting $691 billion bankruptcy. But for financial advisers the overall bear market period between 2007 and 2009 is more often recalled as a series of punishing waves that have forever altered the way financial planning and investing are done.

"Lehman may have been the bulls-eye event, but it was just so much more than just letting Lehman fail," said Paul Schatz, president of Heritage Capital.

Lehman Brothers has been cynically described as a real estate hedge fund disguised as an investment bank, given its lopsided exposure to mortgage origination. But the problems at Lehman were just one of many extreme risks overshadowing the financial markets at the time.

Mr. Schatz cited other 2008 events such as the fire sale of Bear Stearns to JPMorgan Chase, the government takeover of Fannie Mae and Freddie Mac, the sale of Merrill Lynch's brokerage business to Bank of America and the "breaking of the buck" by the Reserve Primary Fund, a money market fund. "Every week it was something else until it ended," he recalled.

"In hindsight, everyone now says investors should have just stayed the course, which is something I believe is complete and utter nonsense," Mr. Schatz added. "Stocks gave back more than a decade's worth of returns and then had to begin to recoup the losses."

While Lehman's Sept. 15, 2008, bankruptcy still stands as the largest in U.S. history, it's worth noting that of the 10 largest U.S. bankruptcies, six occurred in 2008 and 2009.

Financial advisers who lived through the period say they will never forget the disorientation and panic that ensued as they watched the S&P 500 Index suffer a 54% peak-to-trough drop from October 2007 to March 2009.

"We are all products of our past, so I think that means we are all more aware of how bad markets can get if seemingly everything goes wrong," said Tim Holsworth, president of AHP Financial Services.

"It also teaches the lesson that good investments recover, and at the same time, no one is immune, as any GM stockholder can attest," Mr. Holsworth said. "Clients still reference that time; it's way too early to forget."

Leon LaBrecque, managing partner and chief executive of LJPR Financial Advisors, vividly recalls the panic felt by his clients and himself.

"I remember thinking, 'This could be the end,' and that it might be time to start panicking," he said. "And I learned some lessons about being too smug, because I thought I had gotten out of all the subprime mortgage exposure and the really risky stuff, but I didn't realize it had infected everything."

By the time 2008 was complete, everything was in negative territory except for Treasury bonds and the Japanese yen. Even gold, which since the dawn of time has been considered a hedge against disaster, was negative.

Mr. LaBrecque said that while his "natural optimism" helped him get through the crisis, many of his clients are still frozen with fear of another financial market pandemic.

"I tell people, we will get another downturn of 20% and we will have another recession, but they're still afraid of another 40% market pullback," he said.

The economic impact of businesses leaving CT
Author: Samantha Miller
Date: Aug 24, 2018
Publication: WTNH - NEWS 8
Link to Article

(WTNH) - Edible arrangements is the latest Connecticut company getting ready to pick up and move out of state. Financial Expert Paul Schatz, President of Heritage Capital LLC explains what this growing trend means for Connecticut's economy.

'I can't see the economy accelerating from here,' says strategist
Author: Rebecca Quick - Squawk Box
Date: Aug 24, 2018
Publication: CNBC
Link to Article

Mark Vitner, Wells Fargo Securities director and senior economist, and Paul Schatz, Heritage Capital market strategist and president , and guest host Peter Boockvar, Bleakley Advisory Group chief investment officer, join the 'Squawk Box' team to discuss what they're watching the market for and how they're factoring in the Fed's looming rate hike.

Rapper claims Musk scrambling to secure Tesla funding
Author: Seana Smith
Date: Aug 14, 2018
Publication: Yahoo! Finance
Link to Article

Elon Musk says he's working with Goldman, Silver Lake to take Tesla Private. Yahoo Finance's Seana Smith, Myles Udland, Rick Newman, Dion Rabouin and Paul Schatz, President, Heritage Capitol discuss.

Are Democrats and Republicans rejecting capitalism?
Author: Seana Smith
Date: Aug 14, 2018
Publication: Yahoo! Finance
Link to Article

The Trump era has caused political parties to refocus priorities. Yahoo Finance's Seana Smith, Dion Rabouin, Rick Newman and Paul Schatz, President of Heritage Capitol discuss.

Bitcoin slides, takes other cryptocurrencies with it
Author: Seana Smith
Date: Aug 14, 2018
Publication: Yahoo! Finance
Link to Article

Cryptocurrency markets taking a big hit as Bitcoin tumbles. Yahoo Finance's Seana Smith, Rick Newman, Dan Roberts, Dion Rabouin, and Paul Schatz, President of Heritage Capitol discuss.

Turkey calls for boycott of U.S. electronics
Author: Seana Smith
Date: Aug 14, 2018
Publication: Yahoo! Finance
Link to Article

Trade tensions continue to escalate as Turkey retaliates against U.S. sanctions, Yahoo Finance's Seana Smith, Rick Newman, Dion Rabouin and Paul Schatz, President, Heritage Capitol discuss.

Facebook is a $90-$100 stock by 2020, says pro
Author: Andrew Sorkin - Squawk Box
Date: Aug 10, 2018
Publication: CNBC
Link to Article

Paul Schatz, Heritage Capital president and chief investment officer, gives his reasons for taking a bearish view on Facebook.

Brace for a bear-market drop for Facebook, says this strategist
Author: Barbara Kollmeyer
Date: Aug 09, 2018
Publication: MarketWatch
Link to Article

FB's Future?

Tesla’s potential go-private deal is still generating plenty of buzz.

But there are other matters worthy of attention. One market pundit believes we could be at the start of a long-term unraveling of Facebook shares.

Our call of the day comes from Paul Schatz, president of Heritage Capital, who is hanging a buyer-beware sign over Facebook FB, -1.55%

There is a “very good chance that Facebook has seen its peak for possibly many more years to come,” says Schatz, in a note to clients.

He notes that last month’s second-quarter earnings showed the impact of the backlash over privacy concerns won’t be short-lived, as this chart below shows:

Heritage Capital - Post-earnings rout for Facebook
    Post-earnings rout for Facebook

Schatz predicts that in the best-case scenario, the bull market for stocks overall will ride on into 2020 and Facebook can revisit its former high above $218 before it peaks again.

“Worst case is that the market is in the early stages of revaluing the company and after this rally ends, the stock not only heads below the July low of $166, but then below the 2018 low of $149 in the next 6-12 months,” he says. That would equal to about a 20% drop from current levels—Facebook closed at $185.18 on Wednesday.

Heritage Capital - Facebook’s run to $218
    Facebook’s run to $218

He adds that it will take an “awful lot” to change his opinion, given Facebook and Netflix NFLX, -1.00% are both on the defensive, means Apple, Amazon and Alphabet’s Google need to lead and keep outperforming.

“I had envisioned the FAANG stocks holding up until the bitter end of the bull market and find it hard to believe the bull market can easily live on without the group as a whole staying strong,” he adds.

Facebook is up about 7% this month, and it and other FAANG members are comfortably in the black this month as the Nasdaq train keeps rolling, which means some may not be ready to give up on the Zuck just yet.

Yahoo Finance Live: Midday Movers - Jul 25th, 2018
Author: Seana Smith
Date: July 25, 2018
Publication: Yahoo! Finance
Link to Article

Alphabet soup is hot, and clients will pay more for those letters
Author: Jeff Benjamin
Date: July 16, 2018
Publication: Investment News
Link to Article

Consumers value designations, although opinions vary on which ones carry the most swagger

Say what you will about the expansive alphabet soup of financial-planning credentials and designations, but new research shows consumers are migrating toward those advisers with letters listed after their names.

"We found that consumers value the designations, and are willing to pay more for advice from credentialed advisers," said Sterling Raskie, a lecturer at the Gies School of Business at the University of Illinois Urbana-Champaign, and co-author of the study published last month.

While the research did not identify which credentials and designations consumers are most drawn to, it did show a growing interest among consumers in advisers who have attained some designations.

"In the financial planning industry, we're not quite there yet as a profession because there are so many different methodologies when it comes to compensation and types of advisers," Mr. Raskie said. "I think consumers are becoming more educated and aware of things like fiduciary duty, and when an adviser sends the signal in terms of a designation, it doesn't take away the due diligence that a consumer should do, but it makes it easier."

As far as which credentials carry the most swagger, it depends on who you ask.

Linda Leitz, co-owner of Peace of Mind Financial Planning, is a certified financial planner, a certified divorce financial analyst and an enrolled agent of the IRS.

"What we're finding more and more, unless you're a CFP there's a big question mark in a lot of consumers' minds," she said. "Those credentials tell people you have the ability and expertise, and a lot more consumers are realizing they have to have a CFP and someone who is acting as a fiduciary."

Tim Holsworth, president of AHP Financial Services, is a CFP, a chartered life underwriter and a chartered financial consultant.

"It's all about credibility, I believe," he said. "I also believe many, many registered people do a terrible job managing assets. And I believe several designations are complete garbage."

For consumers what are paying attention, or trying to figure it all out, the industry does not make it easy.

The Financial Industry Regulatory Authority lists 184 designations on its website, ranging from accredited adviser in insurance to wealth management specialist.

In that mix, you'll also find such vague designations as global financial steward, master certified estate planner and qualified financial planner.

"I think clients should look for a CFP, but I don't know if they do or not," said Mr. Holsworth. "It's easier to market yourself as a planner with an actual demonstration of competence, but I don't think clients insist on it as much as they should."

Rose Swanger, president of Advise Finance, is a CFP, retirement income certified professional, certified divorce financial analyst and an enrolled agent of the IRS.

But even with such credentials, Ms. Swanger is not convinced of the value of designations.

"Clients value your personality, charisma and trustworthiness more than the knowledge," she said. "Having said that, without the knowledge and specialty training to back it up, the warm fuzzy feeling doesn't last long because ultimately all clients demand results."

Paul Schatz, president of Heritage Capital, has been in the business for 30 years and is only now coming around to the notion that consumers might be paying attention to designations.

"I'm not a big designation person, which is probably the main reason I have not committed to earning any," he said. "It just hasn't mattered, as far as I can tell, although I would imagine some prospects saw that I did not carry a designation and perhaps wouldn't even interview me."

Proving that times are changing, Mr. Schatz added that "there's a chance I will study for the certified fiduciary designation, as I do believe that can help."

Author/Anchor: Matt Scott
Date: July 11, 2018
Publication: FOX 61
Link to Article

Financial experts weighs in on mid-year budget check
Author: Carolyn Freundlich
Date: July 02, 2018
Publication: WTNH - NEWS 8
Link to Article

(WTNH) - We are already into the second half of the budget year and we are speaking with a financial expert weighing in on why now is a good time to take a look at your budget.

President of Heritage Capital LLC in Woodbridge Paul Schatz says now is the time to plan out how you are going to spend your money for the rest of 2018.

Schatz advises to keep on top of your credit report and to consolidate your debt. He also says that its time to rebalance investments accounts and 401Ks because both stocks and bonds have swing wildly this year.

Advisers take a short-term view of trade skirmishes
Author: Jeff Benjamin
Date: June 29, 2018
Publication: Investment News
Link to Article

Some advisers voice worries about repercussions, but say clients are calm

Heading into a week that includes the July Fourth celebration, it would be easy to overlook or ignore the impact of a potential trade war between the United States and several global trading partners.

But savvy financial advisers are paying attention.

"We've done a lot of research on the status of trade negotiations, and our clients are concerned about it because it has already had an impact on market volatility," said John DeSimone, chief financial officer at Dakota Wealth Management.

While Mr. DeSimone is careful not to describe the situation as an official trade war just yet, he is communicating to clients that the advisory firm is prepared to move client portfolios into more defensive positions if things escalate.

The potential for a global trade war, which would see nations and regions of the world introduce taxes on imports in retaliation for tariffs being threatened by the Trump administration, was the main topic of a raft of midyear economic outlooks from financial services firms over the past week.

Douglas Cote, chief market strategist at Voya Investment Management, said the "direct effects of a trade war" are placing a drag on an otherwise solid economy.

"Rumors of trade wars are always problematic since they slow growth and capital flows and exacerbate problems," Mr. Cote said. "So, it's important to see how the world economy is faring as the situation develops."

Barring fresh negotiations between the United States and China, a trade war could kick off as early as July 6, when the U.S. is scheduled to introduce a 25% tariff on $34 billion worth of goods imported from China.

To put that into perspective, the U.S. imported about $500 billion worth of goods from China last year. But the initial round of tariffs on China is just the first one on the Trump administration's agenda.

The U.S. exported $130 billion worth of goods to China last year.

"We have to look at each negotiation separately," Mr. DeSimone said. "I'm not too concerned about a trade war with the European Union. The situation with Mexico and Canada is a bit more complex."

Matt Forester, chief investment officer at BNY Mellon's Lockwood Advisors, said it will be up to investors and the markets to distinguish between "political rhetoric and serious trade policy."

While both consumer and business sentiment levels are currently hovering at record highs, Mr. Forester said the slight pullback in consumer sentiment this week reflects concerns over a potential trade war.

"The size of the impact now is somewhat limited, but it could be extremely damaging," he added. "The risks of a trade war are higher prices and lower output, neither of which is good."

Kashif Ahmed, president of American Private Wealth, said he is more concerned about short-term market gyrations than he is about the long-term impact of the international trading negotiations.

"These skirmishes, while they heighten volatility in the short term, are unlikely to develop into full-fledged trade wars," he said. "Despite the rhetoric from individual leaders, governments are more than one person, with varying levels of checks and balances."

Mr. Ahmed is confident that "plenty of cooler heads will work behind the scenes to prevent this, because no one will be left unscathed on the other end."

John Lynch, chief investment strategist at LPL Financial, said in the case of China, the U.S. has the advantage.

"With far fewer goods exported to China than imported from China, the U.S. retains a structural advantage in a trade dispute," he said. "Consequently, China is going to run out of direct reprisals quickly should it try to match U.S. tariffs."

But as most market watchers and analysts have argued, there are no real winners in a trade war.

"China loses more than the U.S., but the U.S. also loses," said Paul Schatz, president of Heritage Capital.

Asked how worried he is about a possible trade war, Mr. Schatz said his concern is high but not yet keeping him up at night.

"If it was anybody other than President Trump, I'd say the tariffs are coming to fruition, but given his pattern of unusual behavior, I'm counting on them not coming to fruition," Mr. Schatz added. "I'm hopeful for a compromise."

Italy's woes spread to U.S. markets — and advisers' clients
Author: Jeff Benjamin and John Waggoner
Date: May 29, 2018
Publication: Investment News
Link to Article

Some advisers voice worries about repercussions, but say clients are calm

Worries about Italy's political turmoil sent U.S. stocks falling like a Ferrari on a ski jump, and some advisers warned that the situation could become more serious in the short term.

The Dow Jones Industrial Average fell 505 points at its low Tuesday before finishing the day down 391.64 points, or 1.58%. Of the 30 Dow stocks, only one – Coca-Cola – rose. The yield on the 10-year Treasury note fell to 2.77%.

The proximate cause of the downturn was political turmoil in Italy, as the government blocked the formation of a coalition government between the ultra-right League party and the antiestablishment 5-Star party, raising the prospects of new election and, ultimately, withdrawal from the Eurozone.

"The markets are tumbling today due to the worrisome political situation in Italy," said Phil Shaffer, founder of Halite Partners. "This is just another chapter in the European debt crisis contagion saga. The impact of austerity measures taken after the credit crisis have led to the rise of European populism. The situation has the making of a potential European collapse as the story unfolds, but the story is currently far from over."

Christian Thwaites, chief strategist at Brouwer & Janechowski, agreed. "We absolutely should be concerned about the situation," he said. "Greece and Cyrpress were small and containable. Italy is the third-largest country in the European Union, and that's including the United Kingdom. The fear here is that the two parties are talking openly about exiting the Eurozone and the same kind of reforms that the new Greek governmetn was talking about."

And Italy isn't the only thing to worry about. "Italy's dysfunctional political system is being blamed, but the seeds for this decline were sown a week ago when market internals began to deteriorate as prices went higher," said Paul Schatz, president Heritage Capital. "The news today just accelerated the pullback."

Sam Stovall, chief investment strategist for U.S. equity strategy at CFRA, noted that increased volatility is common in the second and third quarter of a midterm election year. "It looks like the market is looking for a reason to go down, and it's saying, 'Let's blame Italy,'" he said. "But the volume wasn't great, and how excited can you be about a downturn if the volume isn't there to confirm it?"

Leon LaBrecque, managing partner and chief executive at LJPR Financial Advisors, agreed that Italy may just been a convenient excuse. "The Italians have been having political crises as long as there have been Italians," he said. "And, if political crises did have lasting effects, then what about Greece, Brexit and Trump? More likely the market overreacted, and this is a buying opportunity. Stay calm, this opera has just started, and [the fat lady] hasn't even started to sing. "

Advisers said that being proactive during the year has helped soothe clients. "We've told clients we're not in any foreign bonds at all," Mr. Thwaites said. "But we have some sophisticated investors who wanted to know what all this means. "

Others said that clients have been extremely calm. "I have not heard from any clients today," said Tim Holsworth, president of AHP Financial Services "My clients rarely react to a bad day or week. Overall, I think they are far more optimistic since the presidential election."

An indicator that's '90% accurate' suggests hidden strength in the stock market
Author: Ryan Vlastelica
Date: May 14, 2018
Publication: MarketWatch
Link to Article

The U.S. stock market may feel particularly risky right now, as major indexes have been volatile throughout 2018 and there are a number of headwinds that investors are monitoring, but things may not be as bad as they seem.

There are multiple signs of equity strength going on below the surface of the major indexes, which could be a signal that the recent uptrend in stocks is justified and could continue.

One positive signal looks at the ratio of rising stocks on the New York Stock Exchange to the number of falling ones over time. Paul Schatz, the president of Heritage Capital, referred to this as "the one indicator that's 90% accurate" for forecasting moves.

Currently, the NYSE's advance/decline line is at an all-time high, as seen in the following graphic from StockCharts, which Schatz included in an email.

NYSE AD line
    StockCharts data, courtesy Heritage Capital

"When the major stock market indices make new highs but the NYSE A/D Line does not, that's where bulls should begin to worry," he wrote, adding that “the exact opposite is happening," which he said was “typically a good sign for further strength in stocks over the medium-term.”

Both the Dow Jones Industrial Average DJIA, +0.37% and the S&P 500 SPX, +0.17% are more than 5% below their records, and they have been in their longest stretch in correction territory since the financial crisis.

The improving A/D line is an encouraging signal for the investors who have been worried about market breadth, especially as some of the market's biggest names — notably the FAANG group of large-capitalization internet and technology stocks — have been leading the overall advance. Because the market's biggest companies have been seeing the biggest gains, those leaders can mask weakness in smaller companies. Schatz compared it to a building where the foundation "is full of cracks and is crumbling but the penthouse looks flawless with million dollar art and furniture."

The improving breadth is helping to support equities, which can be seen in the broader indexes themselves. The Dow Jones Industrial Average, for example, is coming off seven straight positive sessions, while the Nasdaq Composite Index COMP, -0.03% has risen in five of the past six. The Cboe Volatility Index VIX, -4.38% fell for a fifth straight week last week, a sign that anxieties are leaving the market.

"We found good support at the low end of the trading range we've been in, and now all of a sudden we're getting a breakout. We haven't made a new high since January, which is a long time, but the pattern is starting to change. The highs we're making are getting higher," said Donald Selkin, chief market strategist at Newbridge Securities.

Both the Dow and the S&P have shown signs of maintaining their longer-term positive momentum. Both broke below their 200-day moving averages on an intraday basis twice earlier this month, but they subsequently rebounded to close above it each time. Ending below that level, a closely watched gauge for long-term price trends, is seen as a bearish signal, but holding it could be a sign of support for equity prices. Since testing the level, the Dow and S&P have returned above their 50-day moving averages, which is used as a proxy for short-term momentum trends.

NYSE AD line

Again, this isn't simply a matter of the market's biggest names leading the overall indexes higher. According to StockCharts, 61.1% of the S&P's components are now above their 200-day, up from just 50% last week, and back above the 59.55% average over the past 50 sessions (the 200-day average for S&P 500 components above their 200-day moving average is 69.44%).

For the 50-day moving average, 61% of the S&P's components are above this level. That's above this ratio's 50-day and 200-day averages, as well as up from 47% last week.

Ari Wald, head of technical analysis at Oppenheimer, added that the number of net new lows — the number of stocks making 52-week highs minus the number making 52-week lows — had been dropping, a trend that suggests “the selling in stocks is getting less bad.”

He added, “This means that we've been holding up well in periods of consolidation and that the market has been finding a base. This is setting us up for the next move higher in the bull market.”

Pain at the pump possible with pulling out of Iran nuclear deal
Author: Amy Hudak
Date: May 08, 2018
Publication: WTNH - NEWS 8
Link to Article

NEW HAVEN, Conn. (WTNH) -- - Gas prices are climbing in Connecticut and are now more than $3 a gallon in some places.

"It seems like every time you come you just don't know what you're going to get," Rachel Cooper said.

"I fill up once a day for work so about $80 a day right now," Tyler Tucker told News 8.

The next time you fill up, the prices might be even higher. The U.S. pulling out of the Iran Nuclear Deal means the pinch we are feeling at the pump could get even tighter.

"It's one of those things that's just kind of a necessary evil and you deal with it," Eric Urbineti said.

Senator Richard Blumenthal (D-CT) says gas prices will rise. He staunchly opposed President Trump's decision to pull out of the deal on several fronts, calling it a shot in our own foot.

"Americans are less safe because of this self destructive step," Sen. Blumenthal said. "Not only does it undermine our national security, it undercuts our credibility in trying to reach any sort of agreement with the North Koreans on their nuclear deal and it divided us from allies when we need them on our side."

Financial planner, Paul Schatz says the markets were already anticipating the decision.

"It's the worst kept secret in Hollywood that Trump was going to pull out," Schatz told News 8. "Oil has already had a significant rally in part due to the expectation."

Schatz is not so convinced the global economy is going to feel any detrimental effects, saying Americans can rest easy.

"A lot of geo-political loudness, noise, non sense and beating of the chest, but the global economy remains in growth mode," Schatz added.

Pulling out of the Iran Nuclear Deal was a campaign promise President Trump made and has now fulfilled.

Stocks struggle to gain steam, financials lag, economic reports in focus
Author: Seana Smith
Date: May 03, 2018
Publication: Yahoo! Finance
Link to Article

Stocks (^DJI, ^GSPC, ^IXIC) are in the red as major economic reports roll in. All the sectors are in the red with the financial (XLF) sector getting hit the hardest. Yahoo Finance's Jared Blikre joins us live from the floor of the New York Stock Exchange to talk markets. To discuss the other big stories of the day, Yahoo Finance’s Seana Smith is joined by Paul Schatz, President of Heritage Capital, Dan Roberts and Ethan Wolff-Mann.

Last minute tax tips with Financial Expert Paul Schatz
Author/Anchor: Tim Lammers
Date: Apr 11, 2018
Publication: FOX 61
Link to Article

Dow doesn’t let early loss get in way of big rebound
Author: Adam Shell Contributing: Kevin McCoy
Date: Apr 05, 2018
Publication: USA Today
Link to Article

The Dow on Wednesday rebounded from a more than 500-point plunge to close 231 points higher on another rocky trading day.

Wall Street bet that tariff threats and tough talk on trade from China and the Trump administration was likely a negotiating tactic and that the sides would eventually reach a deal to avoid a trade war.

The Dow Jones industrial average, down 510 points at its low, finished the day up 230.94 points, or nearly 1%, at 24,264. The wild price swings came after China struck back against the U.S. with threats to levy tariffs on more than 100 Americanmade goods ranging from autos to airplanes. Traders' initial takeaway was that it signaled an escalation in the trade fight between the world's two biggest economies. But the stock market’s ability to mount a rebound was due in part to investors' bet that neither country wants a full-out trade war despite the tit-fortat tariff threats.

"I think the market is beginning to understand and remember that Trump's bark is much bigger than his bite," says Lindsey Bell, investment strategist at CFRA, a Wall Street research firm. "The trade implications between the U.S. and China are far from complete. Investors are hopeful that the final trade agreement will be much more lenient than what has been discussed in the last 12 hours."

China on Wednesday targeted 106 U.S. goods for import tariffs — includ- ing important agriculture exports such as soybeans — after the Trump administration released a list of 1,300 categories of Chinese goods the U.S. plans to impose tariffs on. Both countries are targeting $500 billion in goods.

Investors were aggressively selling stocks such as airplane maker Boeing and heavy-equipment maker Caterpillar. These large, global U.S. companies do a lot of business in China and overseas, which makes their sales and profits vulnerable if the two countries can't work out a deal before the threatened tariffs, which are still under review, go into effect. Boeing (BA) closed 1% lower, after an early drop of more than 6%. Caterpillar (CAT) erased a 5% drop to finish 0.1% higher.

Paul Schatz, president of Heritage Capital, a moneymanagement firm in Woodbridge, Conn., said the strong finish to the day for stocks would be viewed positively.

The big worry on Wall Street is that corporate profits and sales will be hurt if trade restrictions are put in place, which would be negative for stock prices. Analysts expect strong results from corporate America when companies start reporting quarterly results next week. Profit growth of more than 18% is expected for companies in the Standard & Poor's 500 stock index, up from a forecast of around 12% at the start of the year, according to earnings tracker Thomson Reuters.

Most investors agree that tariffs are bad for business and the economy.

"Tariffs and trade wars are just plain bad," Schatz says. "I don’t care what the president tweets, no one wins."

"I think the market is beginning to understand and remember that (President) Trump's bark is much bigger than his bite." Lindsey Bell Investment strategist at CFRA, a Wall Street research firm.

We've got more downside before we hit all time highs says expert
Author: Kelly Evans - Closing Bell
Date: Apr 02, 2018
Publication: CNBC
Link to Article

Stocks plunge, advisers tell clients to hang tight
Author: Jeff Benjamin and John Waggoner
Date: Mar 22, 2018
Publication: Investment News
Link to Article

Though planners encourage calm, some are preparing investors for a correction

The Dow Jones Industrial Average plunged 724 points Thursday, and advisers are glad they have prepared clients for a more volatile market.

"I don't get a lot of calls on days like this," said David Rae, president of DRM Wealth Management. "I'm always talking about how these things are to be expected."

Mr. Rae said he regularly reminds clients via blog entries and television appearances about what to do when the market drops.

"It makes my life easier," he said.

The nearly 3% decline Thursday, sparked by fears of a trade war and worries about Facebook data breaches, was to be expected, given the stock market's massive rise: 322% since March 2009 and 17.8% in the past 12 months. Nevertheless, the blue-chip index's recent plunge puts the Dow down more than 10% from its late January high, and into official correction territory.

The market "was so non-volatility for so long, and historically long periods of low volatility lead to long periods of high volatility," said Paul Schatz, president of Heritage Capital. "Once the volatility genie came out of the bottle in early February, you had to expect more volatility. But the volatility is moving in both directions."

Mark Bass, financial planner with Pennington, Bass & Associates, said he had no calls about the market Thursday.

"Not a one," he said. "We've been saying for a year or more that we'd like to see the market drop 15%. When people ask, 'What should we do?' we say that we're not going to do a thing but watch it go back up."

Advisers agree that this year's market is dramatically different from last year's, which had less volatility than a napping bunny.

"This isn't the new normal, it's the old normal back again," Mr. Schatz said. "The markets should be moving 1% a few times per week, up or down, although we all prefer up."

And, they say, investors — and advisers — should be prepared for a broader correction.

"You don't want to be selling the rosy returns from last year," Mr. Rae said. "If you take credit for all the up markets, you take the blame for all the down markets."

Mr. Bass noted that, while the start of corrections always vary, the underlying cause is usually the same: an overvalued market.

"You can have something that elicits an emotional reaction that begins a decline, but the fundamentals determine how long a decline continues," he said.

In short, asking why a decline happens might not be the best use of your time.

"The markets don't care about Trump's musical chairs White House," Mr. Schatz said. "Nobody really cares about Facebook.

"You have the Fed conducting a grand experiment of raising rates and cutting its balance sheet while increasing borrowing needs," he said. "Those and Trump's tariffs are moving us toward recession. We will be in recession by mid-2019 or mid-2020."

And sometimes, clients don't hold their advisers responsible.

"My client base skews liberal," Mr. Rae said. "They blame Trump more than me."

From Apple to Lockheed Martin, 9 stocks to buy this spring
Author: Adam Shell
Date: March 16 2018
Publication: USA TODAY
Link to Article

Spring isn't just about cleaning out closets or shopping for your dream home. It's also a good time to freshen up your stock portfolio.

How? By jettisoning stocks you no longer like and buying ones with potential to bloom.

And with the U.S. stock market back on stronger footing after a rocky period early in February and the start of spring coming Tuesday, now's a good time to re-energize your investments.

If picking winning stocks isn't your strong suit, consider these nine from Wall Street fund managers and stock strategists. They say these picks have good upside potential as the 9-year-old bull market, which many pundits say is entering its final stage, chugs on.

The stock gurus named the following:

The Pick: J.P. Morgan Chase

The Pro: Thorne Perkin, president, Papamarkou Wellner, New York.

The bank, the nation's biggest by market value and headed by well-respected CEO Jamie Dimon, should fare well in an aging bull, Perkin says, because at this stage of the rally the economy is gaining strength and interest rates tend to rise. Both trends are good for J.P. Morgan's (JPM) profits. "The bank is well-managed, growing, diversified, disciplined, and future impacts of tax cuts bolster the buy case," says Perkin, adding that its annual dividend of about 2% is a bonus.

The Pick: Apple

The Pro: Brian Belski, chief investment strategist, BMO Capital Markets, New York.

Belski says the bull market could run 10 more years. And what better way to play it than to buy shares of Apple (AAPL). The world's most-valuable company, which is currently valued at roughly $906 billion, is within striking distance of becoming the first stock with a market value of $1 trillion. "Apple is the premier consumer staples company," says Belski, highlighting a crucial reason why the gadget maker will keep prospering as Americans' pay and job prospects improve with the economy. The key investment math related to Apple, he says, is simple: "Cash plus innovation."

The Pick: U.S. BankCorp

The Pro: Paul Schatz, president, Heritage Capital, Woodbridge, Conn.

The Minneapolis-based bank should also benefit from stronger growth and rising borrowing costs for people taking out loans. Another plus, according to Schatz, is that the bank regularly sets aside bigger reserves than they need for bad loans. The upshot to that conservative strategy is U.S. Bancorp's (USB) quarterly earnings turn out to be better than promised, Schatz says. "It's a good bank for the buck," he says.

The Pick: Lockheed Martin

The Pro: Ray Hare, director of equity research, Huntington Private Bank, Cincinnati.

The defense contractor, which posted sales of $51.05 billion last year, should generate high-single-digit revenue growth over the next three years, according to Hare. Bolstering Lockheed Martin's (LMT) sales is the increased spending on defense to "rebuild and modernize the military" laid out in President Trump's 2019 fiscal year budget. Lockheed's business will get a lift, Hare says, as its F-35 fighter jet program ramps up and its missile sales remain healthy.

The Pick: Western Digital

The Pro: Barry James, manager, James Balanced Golden Rainbow Fund, Alpha, Ohio.

The digital world is awash in data. And Western Digital (WDC) is an American computer data storage provider with an array of products that allow customers ranging from gadget lovers to data-intensive businesses to store all that information, whether its in hard drives or the cloud. In the fiscal year ending June 2017, its sales jumped 47% to $19.1 billion according to FactSet. "The innovation in technology continues to create exponential storage growth needs," James says.

The Pick: Cognizant Technology Solutions

The Pro: Robert Stimpson, portfolio manager, Oak Associates, Akron Ohio.

Cognizant, which helps companies save money through efficient and cost-effective information technology, is a perfect stock to own late in a bull run, when the economy could eventually slow and companies become more cost conscious. The IT company has a diverse group of customers, from tech firms to financial companies. That sets them up to "do well in most market environments," Stimpson says.

The Pick: AptivV

The Pro: Adam Abelson, chief investment officer, Stralem & Co., New York.

Aptiv is a Gillingham, England-based auto supplier that specializes in the fast-growing electric-car segment. In short, it's a bet on transportation's future. "It is a play on the powerful long-term trend of electrification and autonomous (driving) that will continue regardless of any short-term economic or market downturn," Abelson says.

The Pick: Westrock

The Pro: Bob Doll, chief equity strategist, Nuveen Asset Management, New York.

The paper and packaging solutions company isn't a sexy stock. But with demand high thanks to the solid economy and strong pricing power, WestRock (WRK) is well-positioned to "expand profit margins, grow sales and cash flow," Doll says. The stock is selling at a price-to-earnings ratio below 10, compared with the broad stock market's P-E of more than 17 times earnings, according to Thomson Reuters. "It's trading at very attractive valuation levels," Doll adds.

The Pick: Donaldson Co

The Pro: Michael Farr, president, Farr, Miller & Washington, Washington, D.C.

Donaldson Co. (DCI), the global maker of filtration systems and products that go into heavy-duty engine and industrial applications, is another stock lacking the buzz of more popular names. But the company has "dominant market share" in many of the areas where it does business, and it has "attractive" long-term growth potential, Farr says. The company also has broad global reach, with nearly two-thirds of its profits coming from outside the U.S., which will allow it to benefit from the ongoing global economic upturn.

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