Sycamore Financial Group

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So far Sycamore Financial Group has created 38 blog entries.

Sycamore Updates and Investment Decisions

Hello from Sycamore,

We admire everyone’s efforts to stay safe as we all continue to navigate through challenging times caused by COVID-19. At Sycamore, we take pride that during these times of uncertainty, there are quite a few things we can remain certain about:

  1. We are fully operational via phone or email for all questions, concerns, and account reviews.
  2. Our clients continue to be the most important asset to our business.
  3. Helping our clients achieve their financial goals, is our number 1 objective.

We use a ‘risk first analysis’ in our investment decisions. This means when considering an investment, we judge the stability of a company and its industry, and the longevity of that stock within its sector. Using this approach has helped us limit exposure to industries like airlines and entertainment that are not very predictable, and due to the uncertain nature of these businesses, we’ve kept most of them out of your portfolios.

This is not our first rodeo, we are no stranger to the fact that there will be good markets and volatile markets. Understanding this, when we put your individual financial plan into place, we consider this as we make the rate of return assumptions.

As we look back over 2019, we can proudly say Sycamore’s Growth & Income portfolios experienced gross returns above 27%. We also feel that it is important to point out that as we write this, the markets are currently sitting around 24,000 which also happens to be higher than where we began the 2019 year.

We continue to thank all of you for being great investors. Stay safe, wash your hands, and stay invested!

Thank you for your business and trust,

Brent Yard
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. The 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 |2020-04-28T22:47:49+00:00April 28th, 2020|2020 Newsletters|0 Comments

COVID-19 Stimulus Package

Hello from Sycamore,

On March 27th, 2020 congress passed and the President signed into law a roughly $2 trillion stimulus package to help individuals and businesses deal with the fall out due to COVID-19. We have not had a chance to learn the specifics of this bill but understand the basics. Here are some of the policies that we think are pertinent to investors.

  1. Required minimum distributions from IRA type accounts have been waived for 2020.
  2. If you have already taken your 2020 RMD it appears that you may be able to ‘roll’ that distribution back into the IRA but only if you can put the money back within 60 days of the distribution. If you took your distribution early in 2020, these monies cannot be put back into your IRA type account.
  3. The tax filing deadline has been moved to July 15th, 2020 and with this, so has the date to make contributions to IRAs and health savings accounts for 2019.
  4. The 10% tax penalty on withdraws from IRA type account for those not yet 59.5 years old is waived on withdraws up to $100,000.
  5. IRA distributions in 2020 will be allowed to be paid back in full within 3 years and not incur any tax as long as the distribution is due to disaster relief. If you elect not to repay this amount, the distribution is taxable as ordinary income. Additionally, you may have the ability to pay this tax liability over 3 years.
  6. Loans from your 401(k) etc. are now allowed up to $100,000 or 100% of the account balance.

If you currently take RMD’s from your account with Sycamore and do not need the money for living expenses, it may be wise to delay those payments. This would allow for a reduced tax bill and potential for having to liquidate assets at a reduced price.

We want to remind you that we are fully operational during these times but are conducting business only remotely. The health and safety of our community continue to be at the forefront of Sycamore’s mind.

Brent Yard
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 |2020-04-02T06:04:52+00:00April 2nd, 2020|2020 Newsletters|0 Comments

Surviving the “Bear”

Hello from Sycamore,

Sir John Templeton, founder of the Templeton funds, had some investment advice for us in August of 1958. “To buy when others are despondently selling and to sell when others are avidly buying requires the greatest fortitude and pays the greatest ultimate reward”. In March of 1994 Sir John had additional wisdom for us. “ This time is different are among the most costly four words in market history”.

I think we can all agree that talking about the last bear market (with the benefit of hindsight) and living through the current bear are two very different things.

All bear markets are different and also the same. Each time we have a sell-off based on emotion, there’s a different event/trigger that causes the sell-off. But each bear market is the same because they involve emotional investment decisions rather than rational  (based on the math or data) decision making. All bear markets are stressful because we are not able to see into the future but this one is more stressful than most because we are all dealing with the possibility of becoming infected with COVID-19 in addition to watching our accounts lose market value.

When you originally made your investment allocation decision, you were not being towed around by your emotions. Changing that original allocation decision based on the current market condition is usually a mistake.

History tells us that ‘bear’ markets generally serve up many wonderful investment opportunities for those that remain cool, calm and collected.

Thank you all for being great investors and for having ice water in your veins and 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. 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 |2020-04-01T04:41:33+00:00March 30th, 2020|2020 Newsletters|0 Comments

This Cranky Market

Hello from Sycamore,

As I type this the market is down about 25% from its recent high and down about 9% today. The recent decline and wide daily fluctuations combined with the current media frenzy can make us all uneasy as investors. We wanted to review some points about your account(s) and let you know what we are thinking.

First, at the core of our stock selection process is the business of the corporation and its ability to consistently grow earnings. We work hard to try to reduce risk by not paying too much for those earnings. Companies or industries that we feel are not consistent profit generators or are in a business that we feel may have a limited future are not in your portfolio. For instance, we do not own any airline stocks and about two years ago we sold out of oil and gas securities as well as oilfield service companies.  We also broadly diversify to try and limit the exposure to any single industry or company. Currently, we believe that the fundamental health of the companies in your portfolio(s) is good.

We do not do any market timing. While we are no happier with the current decline than anyone else, we will not be making any adjustments in your portfolio based on that decline.

Second, this market decline has been quick and volatile, but it doesn’t seem too bad when we compare it to other declines. Stock market declines are fairly common though certainly not much fun. The link below will take you to a communication we sent to our clients in 2010.   While this information is a bit dated…it represents the big picture and we believe is pertinent today.

https://sycamoreweb.com/volatility-since-1900s/

We cannot see into the future so we are not certain of the best path to take but history has taught us many times that share prices will follow corporate profitability over the long run. That is how we select investment holdings for you and why we continue to advise holding those investments over long periods.

One final thought. This may be a good time to put any idle cash to work. We’re finding several bargains.

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. 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 |2020-03-16T04:02:30+00:00March 12th, 2020|2020 Newsletters|0 Comments

Could the Saver’s Credit Help You Save More?

Hello from Sycamore,

The ‘Saver’s Credit’ may make it possible for you to receive a tax credit on your eligible contributions to your IRA or employer-sponsored retirement plan. Depending on your adjusted gross income, you may be eligible to receive a tax credit of up to 50% on the first $2,000 of contributions you make to a qualified retirement plan or IRA. These savings are in addition to any tax deferral that may be available on the contribution.

Limitations do apply – you must be 18 or older, cannot be a full-time student and may not be claimed as a dependent on anyone’s tax returns. The table below  help you understand if you might qualify.

What does this really mean?

If you are married filing jointly and your adjusted gross income is $50,000 you could receive up to 10% tax credit on the first $2,000 you contribute to your retirement accounts. $2,000 x 10% = $200 tax credit.

If you are single with an adjusted gross income of $20,000 you could receive up to 20% back on the first $2,000 you contribute. $2000 x 20% = $400 tax credit.

If you fall into one of these categories, what should you do?

  1. Maximize your contributions to your IRA or retirement plans.
  2. Increase your contribution to maximize your credit.
  3. Bring this piece of paper to your tax preparer.
  4. Call Sycamore for more information or with questions.

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. 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 |2020-03-16T04:01:40+00:00March 3rd, 2020|2020 Newsletters|0 Comments

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
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