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CNBC segments with Schatz:





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Twitter Q4 earnings beat but guidance disappoints
With: Adam Shapiro, Julie Hyman
Date: Feb 07, 2019
Publication: Yahoo! Finance
Link to Article



Social media giant Twitter beat 4Q earning expectations but provided disappointing guidance for fiscal first quarter. Yahoo Finance's Emily McCormick reports and Aegis Capital Managing Director Victor Anthony joins Adam Shapiro and Julie Hyman over the phone. Heritage Capital President Paul Schatz and Yahoo Finance's Ethan Wolff-Mann also join the discussion.


BB&T strikes deal to buy SunTrust- largest U.S. bank merger in a decade
With: Adam Shapiro, Julie Hyman
Date: Feb 07, 2019
Publication: Yahoo! Finance
Link to Article



BB&T Corp. agrees to buy SunTrust Banks Inc., creating the sixth largest retail bank in the United States. Heritage Capital President Paul Schatz joins Yahoo Finance's Adam Shapiro, Julie Hyman and Ethan Wolff-Mann to discuss.


Semiconductor gains could give stocks ‘the all clear'
With: Alexis Christoforous
Date: Jan 29, 2019
Publication: Yahoo! Finance
Link to Article



Paul Schatz, Heritage Capital LLC President, says that if semiconductors can hold on to their gains and add to them in the next couple of weeks then “stocks may get the all clear green light for the next couple of months.” Yahoo Finance’s Alexis Christoforous speaks to him.


Top financial resolutions for 2019
With: Samantha Miller
Date: Jan 22, 2019
Publication: WTNH - NEWS 8
Link to Article



(WTNH) - If re-working your finances is part of your new year resolutions, finding a place to start might be overwhelming. Financial Expert Paul Schatz, President of Heritage Capital L.L.C., shares the money goals that should be at the top of your list this year.

1. Create, update and review your budget

2. Create emergency fund

3. Review 401K contribution

4. Rebalance investment accounts

5. Don't run from the stock market

6. Check credit report

7. Create debt service plan

8. Review credit card rates

9. Bundle insurance

10. Bundle charitable contributions

11. Review beneficiaries

12. Refinance your mortgage

13. Photograph and inventory contents of your home

14. DIY or hire a professional advisor



Finance tips for the end of the year
Author/Anchor: Tim Lammers
Date: Jan 14, 2019
Publication: FOX 61
Link to Article



AS THE PARTIAL GOVERNMENT SHUTDOWN CONTINUES. WE WANT TO TALK ABOUT YOUR FINANCES. JOINING US TO TALK ABOUT IT IS THE PRESIDENT OF HERITAGE CAPITAL LLC PAUL SCHATZ

IT SEEMS LIKE STOCKS HAVE BEEN ON A GIANT ROLLER COASTER FOR MONTHS.

WHAT`S YOUR OUTLOOK FOR 2019?

SHOULD THE AVERAGE INVESTOR AVOID STOCKS?

MY 401K SOARED IN EARLY 2018 AND WENT DOWN HARD TO CLOSE THE YEAR? SHOULD I STAY THE COURSE OR DO SOMETHING DIFFERENT?

ARE THERE OTHER THINGS TO INVEST IN BESIDES JUST STOCKS?

I KNOW THE US STOCK MARKET DID A WHOLE LOT BETTER THAN THE REST OF THE WORLD, WHAT`S GOING ON AROUND THE GLOBE?

WHAT KEEPS YOU UP AT NIGHT REGARDING THE ECONOMY AND FINANCIAL MARKETS? WHAT SHOULD THE AVERAGE INVESTOR LOOK OUT FOR?

WHAT`S YOUR TAKE ON THE ECONOMY FOR 2019? WILL THE JOB MARKET GET BETTER? HOW ABOUT WAGES?

HOW IS THE CT ECONOMY DOING? (MY ANSWER WILL BE NEGATIVE)

ANYTHING WE SHOULD BE WORRIED ABOUT? (MY ANSWER WILL BE A RESOUNDING YES)

PEOPLE HEAR ALL THE TIME THAT THE FED DID THIS AND THE FED DID THAT. DOES IT MATTER TO THE AVERAGE PERSON? THE AVERAGE INVESTOR?

WHAT DO YOU THINK THE FED WILL DO IN 2019?


Theresa May Rules Out a No-Deal Brexit
With: Julie Hyman
Date: Jan 07, 2019
Publication: Yahoo! Finance
Link to Article



Yahoo Finance's Adam Shapiro, Julie Hyman, Brian Sozzi, and Alanna Petroff join Heritage Capital President Paul Schatz to discuss Brexit.


The 10 most in demand skills of 2019
With: Julie Hyman
Date: Jan 07, 2019
Publication: Yahoo! Finance
Link to Article



LinkedIn recently analyzed hundreds of thousands of job postings for 2019 and found that employers are looking for workers with both soft skills and hard technical skills. Among the top soft skill is creativity and for the top hard skill is cloud computing. Yahoo Finance's Adam Shapiro and Julie Hyman discuss with Brian Cheung and Paul Schatz.


US, China officials begin trade talks in Beijing
With: Julie Hyman
Date: Jan 07, 2019
Publication: Yahoo! Finance
Link to Article



The US and China resumed trade talks ahead of March deadline on trade. Yahoo Finance's Julie Hyman, Adam Shapiro, and Heritage Capital President Paul Schatz discuss with China Beige Book International CEO Leland Miller.


These are the 10 biggest risks in the world, according to Eurasia Group
With: Julie Hyman
Date: Jan 07, 2019
Publication: Yahoo! Finance
Link to Article



Eurasia group released a report of the top 10 biggest risks that could impact the world in 2019. Yahoo Finance's Julie Hyman, Adam Shapiro, Brian Cheung and Kristin Myers discuss with Heritage Capital President Paul Schatz.


Eli Lilly to buy Loxo Oncology for $8 billion
With: Adam Shapiro
Date: Jan 07, 2019
Publication: Yahoo! Finance
Link to Article



In a bet on cancer drugs Pharam giant Eli Lilly announced a deal to buy Loxo Oncology which creates drugs for cancers taht can be identified with genomic testing. Yahoo Finance's Julie Hyman, Adam Shapiro, Emily McCormick, Brian Sozzi and Paul Schatz of Heritage Capital discuss.


Estimates of the gig economy gone wrong
With: Adam Shapiro & Julie Hyman
Date: Jan 07, 2019
Publication: Yahoo! Finance
Link to Article



Two leading experts of the 'Gig Economy' say their estimates of its impact were way too high due to spotty data and the recession of a decade ago. Yahoo Finance's Adam Shapiro and Julie Hyman discuss with Brian Cheung and Heritage Capital President Paul Schatz.


Market downturn puts spotlight on active management
Author: Jeff Benjamin
Date: Jan 02, 2019
Publication: Investment News
Link to Article

One of the best ways active managers can earn their money in a down market is by holding cash, something index funds can't do

The momentum toward passively managed index investing is expected to lose some steam as the volatility in the financial markets shines fresh light on the benefits of active management.

It is as cyclical as the markets themselves, and a lot of financial advisers are already making asset-allocation adjustments to bring active managers off the bench as the stock market heads south.

"No question that this downturn in the market will favor actively managed strategies going forward," said Dale Wong, president of Missio Investment Management.

"Greater volatility and dislocation in a sharp downturn typically affects all equities, even those companies whose future prospects for growth and earnings are much more attractive," he added. "This creates dislocations in the market that enhances opportunities that active managers can take advantage of with greater likelihood of asymmetrical returns over a three-to-five-year investment horizon."

A decade-long bull market for stocks has made an easy case for riding along in low-cost index funds, but the spike in volatility over the past three months is triggering some altered viewpoints.

The S&P 500 Index declined by 4.38% last year. But the number that is getting more attention is the 13.52% decline during the fourth quarter.

Meanwhile, actively-managed large-cap growth funds, as tracked by Morningstar, declined by an average of 2% last year, though they were down 15.42% in the fourth quarter.

But inside those broad averages are such extremes as a 17% full-year return by the Fidelity Advisor Series Growth Opportunities Fund (FAOFX). The $680 million fund was down 10.4% in the fourth quarter.

The best-performing large-cap growth fund in the fourth quarter was the $265 million Madison Investors Fund (MNVRX), which was down 7.63%.

"To me, active management is risk management," said Barry Mandinach, executive vice president at Virtus Investment Partners.

"When people buy index funds, most of them don't know what they're giving up in exchange for the low fee," he added. "They're taking on a valuation- and quality-agnostic approach to investing. And that's like driving a car with no brakes, which is fine if you're only going uphill."

One of the best ways active managers can earn their money in a down market is by holding cash, which is something index funds are not able to do.

"In times of market volatility and selloffs, active management is getting paid a premium to keep you from losing too much ground," said Todd Rosenbluth, director of mutual fund and ETF research at CRFA.

"They can go to cash, they can raise cash, and they can buy on the dips, whereas index funds have to track the index," he added.

Dennis Nolte, vice president at Seacoast Investment Services, said cash management is the secret weapon for most active managers.

"If a fund holds cash and is highly correlated to the S&P 500, it'll outperform during down markets," he said.

While index investing isn't yet free, it is dirt cheap, which means most active managers must gain at least 100 basis points over an index just to cover the management fee differential.

But the tradeoff, from an adviser's perspective, is the ability of an active manager to buy low during periods of market volatility.

The flipside of being able to go to cash is that active managers suffer a "cash drag" during bull market periods, which is another reason index funds are more competitive in bull markets.

"Active mutual funds typically trail in the strongest of markets and perform better and better as that tails off," said Paul Schatz, president of Heritage Capital.

"The longer the stock market becomes challenging, the more the active fund manager takes measures, whether right or wrong," he added. "One thing they certainly do is run with higher cash levels. Just that alone can help reduce fee drag. Active managers will also often reduce beta in a portfolio to reduce risk if they don't want to raise cash."



Wall Street experiencing 'a relentless selling wave'
With: Alexis Christoforous
Date: Dec 18, 2018
Publication: Yahoo! Finance
Link to Article



Paul Schatz, president of Heritage Capital LLC, says we're seeing 'a relentless selling wave' even though 'you usually don't find any catalysts late in the year' for selling. Yahoo Finance's Alexis Christoforous speaks to him about how the markets are faring.


2019 could be a stellar year for gold
With: Alexis Christoforous
Date: Dec 18, 2018
Publication: Yahoo! Finance
Link to Article



Gold has been spiking higher in recent days as investors seek a safe haven, and could have a stellar 2019. Yahoo Finance's Alexis Christoforous, Heidi Chung and Paul Schatz of Heritage Capital discuss.


Finance tips for the end of the year
Author/Anchor: Keith McGilvery
Date: Dec 12, 2018
Publication: FOX 61
Link to Article



Paul Schatz, President of Heritage Capital LLC has these tips for your year end finances.

Top 10 Financial Tips for Year-End:
  • Do a dry run through of your tax return
  • Harvest capital losses
  • Recognize capital losses up to $3000
  • Beware of mutual fund distributions
  • Max out your 401K contribution
  • Take your RMD
  • Defer bonus
  • Donate your RMD to charity
  • Donate to charity
  • Spend FSA
  • Fund 529
  • Gift up to $15,000


This is an opportunity to buy cyclical stocks, says pro
With: CNBC
Date: Oct 29, 2018
Publication: CNBC
Link to Article



Paul Schatz, Heritage Capital president, and Jason Trennert, Strategas Research Partners chairman and CEO, discuss the volatility in the markets this month.


Stock market pullback brings out the buyers
Author: Jeff Benjamin
Date: Oct 24, 2018
Publication: Investment News
Link to Article

While some investors react with alarm to market decline, others see it as an opportunity to buy low

While some investors and market watchers are interpreting the latest stock market volatility as a call for caution, others see it as a rare opportunity to buy low.

"I probably carry more cash than I should in client accounts, but I do it for opportunities like this," said Paul Fenner, president and founder of Tamma Capital.

With the stock market nearly 10 years off its March 2009 bottom, advisers like Mr. Fenner believe it's important to take advantage of sudden pullbacks, especially for clients who are still in the accumulation phase.

With interest rates on the rise, Mr. Fenner has added to cash positions by trimming allocations to bonds.

"It's not easy to pull the trigger and buy when things are going down, and it doesn't mean things won't get cheaper, but you gotta have some courage to put some capital at risk when we have these pullbacks," he said. "The markets could bounce back as quickly as they did in February and March."

The S&P extended its October rout to 8.8% Wednesday, making it the worst month since February 2009.

That kind of volatility, especially in the midst of an historic bull market for stocks, has elicited the usual chorus of bear market forecasts.

But because a lot of investors have grown increasingly cautious as the bull market extended, the pullbacks now look like opportunities to some investors and financial advisers.

"We're seeing many investments that supported higher multiples coming back down to earth every day, so if we liked something at $100, why wouldn't we buy it when it drops to $80?" said Ian Weinberg, chief executive officer at Family Wealth & Pension Management.

"The fundamentals of this market and this economy have not changed, except for Fed speak, talk of trade wars and all the political stuff that's always there," Mr. Weinberg said. "We believe there is value in this correction. You can't time these things, and we certainly aren't selling here. Rather, we're buying or looking to buy more of the solid ideas we already have in our portfolios."

Across the industry, some advisers have clients sitting on cash because they've been nervous, while others are building cash positions by reducing allocations to bonds amid rising interest rates.

Looking across the market for opportunities, some categories have pulled back more than others.

Among U.S. equity funds, the small-cap value category as tracked by Morningstar is down 4.2% so far this year, followed by mid-cap value, which is down 4%.

The best-performing domestic equity fund categories this year have been large-cap growth, up 6.7%, and small-cap growth, up 6%. But over the past 30 days, large-cap funds have declined 7.4%, while small-cap funds have dropped 10.9%.

Those kinds of abrupt moves look like an opportunity to Dennis Nolte, vice president at Seacoast Investment Services.

"If you're rolling money over and wondering what to do with it, this is not a bad time to invest in areas like small-cap stocks and emerging markets," he said. "I've been waiting for something like this, and I think it's a good time to sprinkle some money in."

Fixed income is the one area that seems almost universally out of favor.

"We've talked about using CDs instead of bond funds," Mr. Nolte said. "I wouldn't put anything in fixed-income funds with rates going up."

Back on the equity side, the most extreme pullbacks this year have been experienced outside the United States.

Morningstar's category of India equity funds is down 24.9% this year, and down 12.7% over the past 30 days.

Diversified emerging-market funds, which Mr. Nolte is eyeing, are down 16% this year, and down 7.6% over the past 30 days.

Kashif Ahmed, president of American Private Wealth, said advisers should be nimble during market pullbacks because this is when "we earn our fees."

"This is not about trying to time the market, which is generally a dumb idea," he said. "This is about offering you an opportunity to rebalance, which is what you should be doing because buy and hold and doing absolutely nothing to the portfolio is also dumb."

Fear and greed and courage and logic aside, anyone investing at this stage of a bull market has a deep-down belief that the pullback is a temporary disruption and not the start of an angry bear market nosedive.

"I don't think the bull market is over," said Paul Schatz, president of Heritage Capital. "We won't see a bear market until the second half of next year."

Mr. Schatz expects at least two more strong runs for stocks, peaking at the end of this year, then again in July, to about 2% above where prices are today.

The current pullback, he said, is nearing a bottom.

"There's enough evidence that says the market is in the bottoming process right now, and when it's complete we should have a strong last six or seven weeks of the year," Mr. Schatz said. "I could see stocks gaining 5% to 10% in the last seven weeks of the year. Until proven otherwise, the bull market lives on. It's old and wrinkly but not dead."



Expert: Gold is the most unloved sector today, but it's smart money
With: CNBC
Date: Oct 18, 2018
Publication: CNBC
Link to Article



David Ellison of Hennessy Funds and Paul Schatz of Heritage Capital discuss specific stocks and sectors traders may want to look into as stocks continue to drop.


Even if the bull market is heading toward a correction, it’s likely to keep on charging
Author: Thomas Heath
Date: Oct 12, 2018
Publication: The Washington Post
Link to Article

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

Everyone is wondering when this bull market will come to an end.

Tomorrow? Next week? Next month?

After last week’s carnage, you might be thinking: soon.

People are in the news predicting its demise or its survival.

Join the discussion. Pick one.

A friend scoffed when I told him I was writing about Paul Schatz calling a few weeks back for a possible mini-correction.

That's because the stock market always, always, always reverses itself - by a little or a lot.

Yet I am a firm believer that the more information that's out there, the better. Let people read, think, decide for themselves.

Schatz is chief investment officer of Heritage Capital, a Connecticut-based investment firm. He thinks the fundamentals underlying the current bull market - strong corporate earnings, low unemployment, strong economic growth - will remain well into next year.

But he sees some signs that suggested the Dow Jones industrial average might have a steep and quick decline.

"If it comes, it’s a short-term pullback in an ongoing bull market," Schatz said. "Any weakness we get remains a buying opportunity."

He sees the 30-stock composite Dow, which has been bouncing near all-time highs in the 26,500 range, still hitting 30,000 by the Fourth of July.

In the meantime, he anticipated “some kind of mid- to-upper-single-digit pullback in stocks."

Schatz has a quantitative model that I don’t quite understand, which is why he is the guy who invests money and I am the one who writes about it.

"I need five closes above 27,000," he said, referring to the Dow. "Once it closes above 27,000 for five straight days, the next high will be 30,000."

Why the pullback?

"The reasons behind it are never apparent ahead of time," he said. "And it's never the obvious one. The reason this window is open is what's been going on beneath the surface of the stock markets."

Schatz said about 10 to 15 percent of the Russell 1000 Index, considered a bellwether for large-cap stocks, are trading in a bear market. That means they are cheap.

He is talking about General Electric, Ford Motor, General Mills, AT&T and some utilities, banks and home builders. These are large, older companies that tend to pay big dividends but at the moment are unappreciated by investors. Many are called value stocks.

The current bull market has been underpinned by growth companies such as Facebook, Netflix, Amazon.com (whose founder, Jeffrey P. Bezos, owns The Washington Post) and Google parent Alphabet.

Schatz sees a split between supercharged growth and lagging-value stocks that he calls "unhealthy."

"You have a surge in the number of stocks making new highs, and a surge in stocks making new lows,” he said. He was not sure why there is a split, but he sees it as a possible cause for a sell-off.

There are other signs, big and small, that portend a sudden pullback. The Dow has taken over leadership of the markets, making new highs ahead of the other, broader indexes such as the S&P 400 (full of midsize stocks) and the Russell 2000 Index small caps.

That means the gains are concentrated in a somewhat smaller sample size.

"To use a military analogy: The generals have continued into battle, but the troops have all died," Schatz said.

Just looking at the Dow, which is the most popular barometer, doesn’t tell the full story.

"I look at the number of stocks going up and the number going down every day," he said. "During the second and third quarters of this year, most stocks were going up on most days. Now that has turned around. For the past month, you have seen more stocks going down than going up."

Under Schatz's calculations, the conditions for a pullback will last only about a month to five weeks.

"How do you know you're right or not? Obviously, if stocks go down, I’m right," he said. "If they don’t, I’m wrong."

Jason Thomas, chief economist with the Carlyle Group, doesn’t see a serious pullback anytime soon.

"The slow pace of growth in this expansion reflects the lack of obvious excesses," Thomas said. "As a result, the next recession could be further off than people suspect."

I asked Ed Yardeni, president of Yardeni Research, for his take.

Yardeni phoned me while he was making the rounds of clients on the West Coast.

"They are fully invested but nervous," Yardeni said. "They're nervous that the business cycle is about to make a big comeback. With the labor market being so tight, they worry that wage inflation will suddenly spike up."

Even with the sell-off, Yardeni expects the bull market will charge ahead.

"If all it is is a single-digit sell-off, I wouldn't worry about that very much and just stay with a bullish market," Yardeni said. “The problem with predicting a sell-off is you also have to predict when to get back in."

Yardeni said he does not see anything convincing out there that a recession is imminent.

"This expansion could be the longest one once it crosses July of next year," he said. "It could continue into 2020. Until I see more compelling evidence, I'm staying bullish."



Expert Discusses Stock Market Dive
With: Heather Burian
Date: Oct 11, 2018
Publication: CNBC-TV18
Link to Article



Paul Schatz, president and chief investment officer at Heritage Capital, said the stock market swing is simply a "normal, welcome, expected and healthy bull market pullback."


Stocks in the red after yesterday's big selloff
With: Seana Smith
Date: Oct 11, 2018
Publication: Yahoo! Finance
Link to Article



Stocks (^DJI, ^GSPC, ^IXIC) are down, with the technology (XLK) sector the most in the green, and the energy (XLE) sector the most in the red. 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 and Dion Rabouin are joined by Dan Roberts, Ethan Wolff-Mann, Brian Sozzi and Brian Cheung. Also joining the show: Brian Brenberg, John Davi, Paul Schatz, and Peter Kenney


Dow fell for the first time in five days Monday
Author/Segment: Squawk Box
Date: Sep 26, 2018
Publication: CNBC
Link to Article

Paul Schatz, Heritage Capital market strategist and president, and Matt Toms, Voya, joins 'Squawk Box' to discuss markets ahead of the Fed's meeting and amid trade tensions.





Starbucks is reshuffling in post-Schultz era
With: Seana Smith, Dion Rabouin & Ethan Wolff-Mann
Date: Sept 25, 2018
Publication: Yahoo! Finance
Link to Article



In a memo last week, Starbucks CEO Kevin Johnson announced corporate restructuring plans which include layoffs. Yahoo Finance's Seana Smith, Dion Rabouin and Ethan Wolff-Mann discuss with Heritage Capital's Paul Schatz.


Stocks mostly flat following Trump's UN address
With: Seana Smith & Dion Rabouin
Date: Sept 25, 2018
Publication: Yahoo! Finance
Link to Article



... joining the show, president, Heritage Capital, Paul Schatz; CEO of ARM, Simon Segars; CEO Smarkets, Jason Trost; and PayScale’s lead economist and VP of data analytics, Katie Bardaro.


As Dow marches on, why energy and biotech sectors are ones to watch
With: Seana Smith
Date: Sept 25, 2018
Publication: Yahoo! Finance
Link to Article



Heritage Capital president Paul Schatz says stocks are hitting all of his targets and Dow 27,000 is next. He points to energy and biotech sectors as ones to watch. He sits down with Yahoo Finance's Seana Smith, Dion Rabouin and Ethan Wolff-Mann to discuss.


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 ETF.com 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
With: 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.






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