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So far Sycamore Financial Group has created 33 blog entries.

Reevaluate Your Beneficiary Designations

Hello from Sycamore,

Are your beneficiary designations current?

Over time, events may arise that necessitate a change in beneficiary information for your qualified & taxable brokerage accounts. It’s important to periodically check the beneficiary status of your investment accounts. Accounts that are lacking beneficiary information, or contain information that is not up to date, could create an issue for your survivors. It’s important to note that a beneficiary change to an account will only affect that account. Should you have multiple accounts (including 401(k)’s, life insurance policies, annuities, etc. from other vendors), you will need to update each one individually.  If you feel changes may be needed or are uncertain of your current beneficiary selection feel free to contact us.

If your accounts are held with Folio investments, you can check your beneficiary designations by logging in and selecting account settings then either the – ‘TOD beneficiary’ on taxable accounts or ‘beneficiary’ for IRA type accounts – section of each separate account.

Thanks for your business and trust,

Sycamore Financial Group

By |2019-10-31T04:58:36+00:00October 31st, 2019|2019 Newsletters|0 Comments

Maximizing your 401(k) Match

Hello from Sycamore,

Retirement accounts such as a 401(k), 403(b), 457(b), etc., can be useful wealth building tools. These plans can help you achieve your dreams of retirement. Choosing to sign up and contribute to a retirement plan is step number one, ensuring you are getting the full benefits of the plan is step two.

Retirement plans are typically set up in a way that the employee is rewarded for saving their money. For example, many 401(k) plans offer a matching contribution feature to where the employer has elected to match some or all your contributions.

Ensuring that your contribution rate is high enough to receive the full employer match is important. All monies deposited into your account by the employer are in essence, a pre-tax raise. Over time, the additional monies that find their way into your retirement plan could amount to an earlier retirement and/or a higher income in retirement. Check with your plan sponsor to find out if your account is receiving the maximum match so that you are not “leaving money on the table”.

As always, please reach out should you have any questions.

Thanks for your business and trust,

Brent-Yard-Sycamore-Financial

Brent Yard
Investment Adviser
Sycamore Financial Group

By |2019-10-31T04:59:40+00:00June 27th, 2019|2019 Newsletters|0 Comments

Performance Update – January 2018

Hello from Sycamore,

“Well 2017 has come to a close and we think you’ll agree that it was a very good year.  Our Growth and Income Composite gained a bit more than 21% for the year. In fact we had enough gain in 2017 to equal two very good years so we’d not be surprised to see the pace slow significantly over the next year or so.”

You’ve just re-read the first sentence in our year end letter for 2017. With the recent volatility it’s easy to forget how much the market advanced in 2017. Generally speaking we are pleased with 2018 and it has turned out about as we expected. FYI – don’t be concerned…we are not turning into market timers! We don’t like the market’s overall decline of more than 4% but when you sprinkle in the advance in corporate profits and the tax decreases…2018 shapes up pretty well and certainly leaves us optimistic about 2019. The economy continues to chug along and generally ‘weak markets’ are followed by ‘strong markets’. Unless the economy weakens significantly, we feel 2019 could be a good year for investors. Sycamore’s Growth and Income composite performance is listed below. Your individual performance can be found on your individual performance reports which are enclosed. The chart below compares the return of Sycamore’s Growth and Income Composite (gross of expenses) to the S&P 500 index including dividends. All returns are annualized through 12/31/2018.

1yr 3yr 5yr 10yr 15yr 20yr
Sycamore Growth & Income Composite* -5.76 9.49 8.28 13.12 8.86 7.84
S&P 500 ** -4.38 9.26 8.49 13.12 7.77 5.62


The Economy As We See It

We think the basics of the economy look good. Our rate of growth (expansion of our economy) was about 3%. This is somewhat better than we’ve been averaging for the last few years and the last few years have been giving us good results. There is a pile  of data that tell us the economy is doing well and that last year’s tax decrease for corporations was a win for shareholders. Let’s look at just a couple…unemployment now stands at 3.7% and continues to decline. In fact the recent employment report shows that our nation created 312,000 jobs in December dwarfing an expected 184,000. The federal Reserve Bank continues to raise interest rates which we feel indicates the economy is still on track. At a glance, new orders for durable goods, retail sales, consumer confidence, industrial production and housing starts continue to trend higher. We’ve stated several times over the last few years that we are pleased with the economic “big picture” and that we feel it will provide the platform for growing corporate earnings. We see no reason to change that outlook. Oh…one last thing. We believe that in the long run share prices are driven by profits. Of course, as we’ve seen recently, the market is emotional and anything can happen in the short run.

Recent Securities Transactions

We had a request recently (thanks George) to add a couple of lines each quarter summarizing some of the activity in our portfolios. Keep in mind that not all portfolios contain the same holdings so your individual portfolio may or may not have had the activity that follows.

  • SCANA is being purchased by Dominion Resources and we choose to sell the SCANA rather than accept shares of Dominion.
  • We elected to sell both Harsco and World Fuel Services. We feel that the recent deterioration of the fundamentals on both of these companies will continue.
  • Express Scripts was purchased by Cigna. Our decision was to not hold Cigna at its current valuation.
  • We liquidated all holdings of Lamb Weston. This stock simply has increased in price so much that we feel the funds can be put to better use elsewhere – this is what we’d always prefer.
  • Praxair was merged int Linde. We expect to continue to hold Linde shares.
  • Looking ahead, Harris Corp is buying L-3 Technologies. We like and currently own both companies and intend to maintain that position through Harris. United Technologies has purchase Rockwell Collins and is spinning off their Otis elevator and Climate and controls divisions. We currently own Rockwell and United Tech and expect to keep the shares of United Tech issued for Rockwell and the spin off units at this time.

We’re looking forward to 2019 and hope you are as well. For questions or concerns, please don’t hesitate to contact us with any questions.

Thanks for your business and trust!

Sycamore Financial Group

*Data not audited. *Results reported gross of fees. **Past performance does not assure future results.  Investors cannot invest directly in the stock market indexes such as the S&P 500.  Investment return and principal value of an investment will fluctuate.  Investor value, when sold may be worth more or less than their original cost.

By |2020-01-11T07:25:11+00:00January 25th, 2019|2018 Newsletters|0 Comments

The Market is Volatile – Is this Normal?

Hello from Sycamore,

If you have been watching the news lately, you have likely seen that the markets have been volatile. What should you do you ask? We believe it is best to stay the course. These recent, large single day declines may seem a bit spooky, but when we look at the big picture, these are to be expected with an index that has increased in value over time. The Dow Jones Industrial Average (DJIA) has been around for over 122 years and in January 1975 the DJIA was valued a little over 600 points, now fast forward to 2018 we have seen the DJIA climb to well over 26,000 points.

If we learned one thing from some of our most volatile times: the great depression of 1929, black Monday 1987, Friday the 13th, 1989, the dot com crash of 2000, September 11, 2001, or the recession of 2008 – it is that markets are resilient. Historically September proves to be the worst performing month of the year and then October follows it and proves to be the most volatile month in the market. For these reasons we aren’t surprised by the volatility we are currently seeing. Looking back on the market we have also noticed you can’t avoid volatility, but you can persist through it.

We do however, understand seeing large single day declines may feel alarming, but if we look at the 10 largest single day point declines vs the 10 largest single day percentage declines it can point out that although the single day numbers are larger, the percentage declines are smaller. We may not like seeing the large point declines, but even a decline of over 1000 points is under a 5% change, making this much lower than the drops we have seen during even the most recent recession (2008).

Largest Single Day Point Declines Largest Single Day Declines by %
Rank Date Close Net Change % Change Rank Date Close Net Change %Change
1 2/5/18 24,345.75 -1,175.21 -4.6 1 10/19/1987 1738.74 -508 -22.61
2 2/8/2018 23,860.46 -1,032.89 -4.15 2 10/28/1929 260.64 -38.33 -12.82
3 10/10/2018 25,598.74 -831.83 -3.15 3 10/29/1929 230.07 -30.57 -11.73
4 9/29/2008 10,365.45 -777.68 -6.98 4 11/6/1929 232.13 -25.55 -9.92
5 10/15/2008 8,577.91 -733.08 -7.87 5 12/18/1899 58.27 -5.57 -8.72
6 3/22/2018 23,957.89 -724.42 -2.93 6 8/12/1932 63.11 -5.79 -8.4
7 9/17/2001 8,920.70 -684.81 -7.13 7 3/14/1907 76.23 -6.89 -8.29
8 12/1/2008 8,149.09 -679.95 -7.7 8 10/26/1987 1793.93 -156.83 -8.04
9 10/9/2008 8,579.19 -678.92 -7.33 9 10/15/2008 8577.91 -733.08 -7.87
10 2/2/2018 25,520.96 -665.75 -2.54 10 7/21/1933 88.71 -7.55 -7.84

Source Wikipedia

So back to the original question – is this normal? We feel it is.

Thanks for your business and trust!

Allison Rumschik
Sycamore Financial Group

*Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Investment return and principal value of an investment will fluctuate. Investor value, when sold may be worth more or less than their original cost.

By |2019-10-31T05:07:50+00:00November 13th, 2018|2018 Newsletters|0 Comments

Qualified Charitable Distributions – Summer 2018

Hello from Sycamore,

Qualified Charitable Distributions (QCD), a gift to charity may also be a gift to you:

A qualified charitable distribution is an otherwise taxable distribution from an IRA that is paid directly to the qualified charity. With the recent tax law changes and elimination of many itemized deductions, this may be the right year to ask us how this could help you or a loved one. If you are considering giving a gift to charity, read more to see if a QCD is right for you:

1. You must be over 70 ½.
2. You must have to take RMD’s from your IRA.
3. You do not itemize on your taxes.

Other items of interest:

1. Donations must be made to a charity that has been designated as a 501(c)(3).
2. The maximum annual deduction amount is $100,000 per individual.
3. Donations must be made during the calendar year.
(E.G.: January 1, 2018 – December 31, 2018).

Potential Benefits of QCD’s:

1. Reduce adjust gross income (AGI) for tax year the gift is given.
2. Lower taxes paid on Social Security.
3. Increase amount of deductible medical expenses.

Please feel free to call us if you want to discuss if a QCD is right for you 765-455-1554.

Thanks for your business and trust,

Sycamore Financial Group

_________________

Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

By |2020-01-13T08:20:20+00:00June 28th, 2018|2018 Newsletters|0 Comments

Tax Cuts and Job Acts – Spring 2018

Hello from Sycamore,

There are tax law changes that went into effect on 01/01/2018 and are set to expire on 12/31/2025. Sycamore, although not tax professionals, would like to point out some items that could have material affects to you. Below are some of the changes that may impact you – please consult a tax professional for advice and confirmation:

INCOME TAX BRACKETS: Federal income tax brackets were changed and most were reduced. While capital gains tax rates have remained the same, the brackets have increased slightly.

HOME OWNERS: If you own a home in a high-tax area of the United States you may be affected under the new law by a $10,000 limit on how much state and local tax (including property taxes) you will be able to deduct from your federal income tax. Home-equity loan interest will NOT be deductible under new tax law, whether you itemize or not.

529 SAVINGS PLANS: You may use funds of up to $10,000 a year from 529 accounts to pay for k-12 expenses at private institutions under the new law. The funds cannot be used for home schooling expenses.

YOU TYPICALLY FILE AN ITEMIZED RETURN: The standard deduction has increased from $6,350 to $12,000 for single tax payers, $9,350 to $18,000 for head of household filers, and $12,700 to $24,000 for married couples filing a joint return. If you are age 65 or over, blind or disabled, you can tack on $1,300 per married taxpayer to your standard deduction ($1,600 for unmarried taxpayers) Claiming personal exemptions has been one way to reduce your taxable income. Under 2017 laws the exemption amount was $4,050 each for individual, spouse, and dependent. Under the 2018 tax laws, the personal exemptions have been eliminated. Here are a couple examples:

1. Single – No Children

a. Standard deduction increases from $6,350 to $12,000
b. Personal exemption decreases from $4,050 to $0
c. Old tax break: $10,400 vs. New tax break: $12,000

2. Married Filing Jointly – Two Children

a. Standard deduction increases from $12,700 to $24,000
b. Personal exemptions decrease from $16,200 to $0
c. Old tax break: $28,900 vs. New tax break: $24,000
(https://www.investopedia.com/taxes/how-gop-tax-bill-affects-you/, 2018. Amy Fontinelle)

Under 2018 law, the deduction labeled as Miscellaneous Deduction which allowed tax payers to deduct expenses such as tax preparation, investment fees, and unreimbursed employment expenses has been eliminated.

ESTATE TAXES: The amount of your estate that will be tax free has doubled through year end of 2025 when the change is set to expire. Under 2017 laws the tax-free limit was $5.49 million for individuals and $10.98 million for married couples, the new limits are $10.98 million and $21.96 million, respectively.

INVESTORS: Under new law, the maximum corporate tax rate is 21% compared to a 2017 maximum rate of 35%. It has been nearly 30 years since corporate tax rates have been reduced under president Ronald Reagan. While we are not sure of what the outcome of the reductions will be, it would be likely to see potentially higher dividend rates, more competitive product pricing to place pressure on competitors, and expansion of business operations.

Thanks for your business and trust,

Craig Smith
Sycamore Financial Group

_________________

Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

By |2020-01-11T11:25:31+00:00April 17th, 2018|2018 Newsletters|0 Comments

We Don’t Want To Brag but…

Hello from Sycamore,

Building the wealth of our clients means we focus on essentials and generally avoid the clutter associated with marketing ourselves as a firm. But sometime the news is so good that it becomes a genuine occasion to celebrate with our friends. We just had one of those moments.

In 1990 we began to manage separate accounts for our clients and, since September of 1996, we have had those accounts independently verified by Ashland Partners. We send our verification and the composite performance of the accounts we manage as a whole to Morningstar, a company that rates managers against other managers in their category. Morningstar awards stars from one to five, with five stars being the highest rating possible. It’s an important, and highly coveted, standard of excellence.

Since roughly …forever… Sycamore Growth and Income Composite performance has been rated with four stars. We manage with a conservative bent and have been pleased to consistently earn a 4-star rating, believing it spoke to our investment management abilities going forward.

As of 3/31/2016, Morningstar awarded our Sycamore Growth and Income Composite performance the elusive 5-star rating! This will be a day we all remember here at Sycamore Financial Group and we are honored to have succeeded on your behalf.

We appreciate your continued business and trust,

Craig

Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

_____________
Comments contained above are meant to be generic in nature and are not meant for specific action.

By |2018-12-05T11:56:39+00:00May 5th, 2016|Craig’s Commentary 2016|0 Comments

Questions During The Bull Market

Stock prices have advanced significantly over the last few years causing several indexes to reach new all-time highs. This has generated a couple of questions that we have been discussing frequently with clients.

Question: Should you consider selling because the overall market indexes are making new all-time highs?
Answer: We don’t think so. Near the time that I started in this business 1975 the Dow Jones 30 Industrial average was a little above 600…yes you read that right…600 total. Today it’s about 16,500. This index and many others that measure share prices, generally will reflect the profitability of the companies represented by the index and usually company profitability will follow the growth of our general economy. Our economy has grown over the years and continues to grow. The indexes as a reflection of that growth should continue to make new all-time highs. I’ve been witnessing this my entire career and believe that will continue.

Question: Are individual share prices over-valued?
Answer: Our answer here is the same as for the first question…we don’t think so. During the 2008 and 2009 market decline, share prices fell far more than the decline of most earnings. This difference was created from jitters caused by the banking crisis and concern about a possible recession. Some of these concerns came to pass, but as is frequently the case, some investors were willing to sell their shares at prices that simply, (in our opinion) were lower than could be justified by the corresponding drop in profits. By the way, it’s now easy to look back and see that this created an opportunity for investors. Isn’t hind-sight great? We believe the greater than normal increase in share prices over the last few years has simply brought them back to valuations that we would classify as ‘fair’ based on current profitability of businesses.

Thanks for your business and trust,

Craig

Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

_____________
Comments contained above are meant to be generic in nature and are not meant for specific action.

By |2018-12-05T11:57:13+00:00June 4th, 2014|Craig's Commentary 2014|0 Comments

Reflecting on Recent Progress of Economy

As a general rule progress comes in very small increments. Whether we’re talking about the economy or learning to play a piano, often the day-to-day gains are barely measurable. We are primed to want “more…better…now” and as time passes we reassess our long-term investments, asking “what have you done for me… lately?” Frequently the best way to appreciate a financial position is to stop and reflect on economic progress over a longer period of time. With that in mind, let’s compress time and evaluate our economic progress since the low point of the Great Recession of 2008-2009.

Before we start, we want to be up-front with an important disclosure: we’ve ‘cherry picked’ a bit (not a lot) and rounded off the numbers to give you a Big Picture that’s easy to follow.  Not all measurements are positive but certainly the majority are trending the right direction.

  1. Gross Domestic Product (the measurement of the expansion of our overall economy annualized); Q3 2008- negative 8%…Q2 2013-positive 1.7%.
  2. Retail auto sales (annualized); Q1-2009-nine million…Q2-2013 fifteen million.
  3. New orders for durable goods; Q1 2009-$150 billion…Q2 2013-$225 billion.
  4. Monthly retail sales; Q1 2009-$300 billion…Q2 2013-$380 billion
  5. Total housing starts (annual rate); Q1 2009-500 million…Q2 2013-800 million
  6. Industrial production (2007 = 100); Q1 2009-85…Q2 2013-100
  7. Non Agriculture employment; Q2 2009-130 million…Q2 2013-136 million
  8. Consumer confidence (100 = 1985); Q2 2009-25… Q2 2013-80

Yes, the economic recovery has been tepid; but we see the current trend continuing and a silver lining in the slow growth. There’s a possibility that the current expansion will last longer than most, and that inflation and borrowing costs (i.e. interest rates) will remain low.

Oh I almost forgot…one more statistic. The Dow Jones Industrial Average; Q2 2009-6500…Q2 2013 15,500.

Thanks for your business and trust,

Craig

Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

_____________
Comments contained above are meant to be generic in nature and are not meant for specific action.

By |2020-01-11T07:26:47+00:00August 8th, 2013|Craig's Commentary 2013|0 Comments

Diversification – June 2013

Asset Class Allocation

In March 2009 the market hit a low point (I’ll bet you still remember). Since then it has risen about 100% so we’re all feeling much better except for those ‘nagging memories’. During the last few months, as some markets have reached new all-time highs, we’ve had a lot of questions about valuations. “Is the market to high?” “How’s the economy?”. “Should I sell and wait for a correction or change my allocation?”

Let me start with the markets making new all-time highs. When I started in this business…1973…the Dow Jones was about 600-700. Today it’s about 15,000. We’re used to the markets making new highs.

Now let’s turn to the economy. At this time we see the economy continuing to chug at a modest pace for some time before encountering another normal recession. Remember that recessions are periodically needed and expected. We also do considerable on-going research and analysis on the securities in your portfolio(s) and continue to find plenty of stocks selling at what we feel are bargain prices.

Change your allocation? Sell and wait for a correction (AKA market timing)? We don’t think so.

Whenever the market has a significant move up…or down…It’s easy to wonder if it’s time to be more conservative or aggressive but recalling what you have and why can help. Equity portfolios managed by Sycamore are broadly diversified with individual holdings in Large, Mid and Small Capitalization stocks and International holdings. Additionally portfolios are invested across our economy with holdings in 11 sectors (Basic Materials, Utilities, Medical services etc.)that we’ve identified. We feel the equity portion of your portfolio(s) are adequately diversified. This leaves the selection of your portfolio’s “class” (Stocks – Bonds) as the important question for consideration. Most of you have been clients for 20,30 or (yes it’s true) almost 40 years so you’re aware that we encourage clients to hold equities as long as their time horizon and tolerance to pain (or in some cases “shock and horror”) J are adequate. Our philosophy on this has not changed over the years and remains unchanged today. Why? Results! As we look at our long term client’s portfolios we find hundreds that have had far better results with stocks than with Bonds.

Consider this (yes we’re aware that we’ve written about this before but it’s important). Rounded off for purposes of this illustration, we find historic returns of about 10% for Stocks, 5% for Bonds. At first it appears that stocks earn about twice as much as bonds. However, we feel that the only ‘return’ to our clients that counts is the net return after adjusting for taxes and inflation. When we apply this formula we get an altogether different picture. First let’s look at the simple net (after adjusting for taxes and inflation) return for each class. Stocks start at 10% less about 2% for taxes and 3% for inflation leaving a net real return of about 5%. Bonds start at about 5% less 1% for taxes and 3% for inflation leaving a net real return of 1%. 1%?…1%? Not much huh? So after adjusting for taxes and inflation we find that Stocks earn about 5 times as much as Bonds. Now let’s just assume that you’re investing $100,000 for 20 years. What would your ‘net real’ (after taxes and inflation and allowing for compounding) earnings be on each investment? Well bonds/fixed investments come in at a blistering $122,130. Stocks/equities manage $271,264. Since each investment started with $100,000 the ‘net real’ gain on bonds/fixed was $22,130 vs. $171,264 for stocks. That’s about 1200% more. OK now to even the score a bit. Bonds and other fixed/guaranteed investments can play an important role in your portfolio. They offer a safety net and a pool of money that is assessable while other investment classes like stocks or real estate are experiencing their normal fluctuations (Bear markets). They can also bring comfort to the investor during recessions etc.

So… back to the question at hand. Should you consider making any changes based on our current market and economic conditions? We aren’t finding any reasons to do so at this time but we’ll let you draw your own conclusions.

Thanks for your business and trust,

Craig

Past performance does not assure future results. Investors cannot invest directly in the stock market indexes such as the S&P 500. Invest return and principal value of an investment will fluctuate. Investor value, when sold, may be worth more or less than their original cost. The material in this presentation is for illustrative purposes and does not reflect any particular investment.

_____________
Comments contained above are meant to be generic in nature and are not meant for specific action.

By |2018-12-05T11:58:03+00:00June 7th, 2013|Craig's Commentary 2013|0 Comments
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