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So far Sycamore Financial Group has created 56 blog entries.

Performance and The Markets

Hello from Sycamore,

As I compose this letter, the markets are in a state of uncertainty about a possible economic slowdown and the direction of the tariff situation. Of course, this has made the nightly news, and almost every pundit on the internet tells us how bad the situation is. At this point, we’re not certain we agree. First, economic slowdowns have always been a normal part of economic cycles, and IF we experience another slowdown, we will view that as just a part of ‘normal’. Second, let’s look at the numbers that affect you. While the general markets have sharply declined over the past few trading days, the S&P 500 is only down about 9% so far this year, and it is still up about 6% from 1 year ago. Our Growth and Income composite gross of fees has declined about 5% so far this year, and over the past year, it’s gained about 4%. Considering that our composite is up nearly 15% per year over the past 5 years, including the recent decline, we think the current correction is manageable.

We have a saying around Sycamore that goes something like this…”We don’t know when ‘IT’s’ coming or where ‘IT’s’ coming from, but we know ‘IT’s’ coming.” Well…now that ‘IT’s” here, what do we – or you as investors, do now? The answer to that question is easy because we’ve been expecting ‘IT’ and we’ve been preparing. In fact, we spend much of our time preparing our clients’ portfolios for ‘IT’. We have no control over many of the factors that can affect our economy – war, interest rates, economic policies, etc., but we do control the stocks that we hold in your portfolios, so that is where we spend much of our time. We select companies that have shown the ability to perform relatively well during both good and bad times (paying special attention to how they perform during bad times) over the long run. We refer to this as repeatability. As most of you already know, we want growth, but not if it comes with too much risk. We want you to own companies that will emerge from any slowdown or challenge, stronger and more profitable than before. All this means the answer to our question “what do we do now”, is; this has been expected, and we feel we’ve prepared, so we make no changes. Additionally, we feel you should follow our lead. You knew this was the answer all along, didn’t you!

According to the model used by the Atlanta Federal Reserve Bank, our overall economy will show negative growth of about 2.4% annualized for the 1st quarter of 2025. This does not mean we will have a recession, but if the numbers are accurate, our economy has slowed a bit. On the brighter side, housing starts, which had weakened in January, bounced back in February. Additionally, the interest rate reductions we had in 2024 should help our economy, and if a slowdown does appear on the horizon, we’d expect more rate reductions to help stimulate our economy. We’ve had reasonably good news on the inflation front recently, with the annual rate for March reported at 2.4% annualized, slightly lower than February’s 2.8%.

Purchase and Sale Activity During Q-1
Purchases – Sonoco – SON, Leggett and Platt – LEG, and Pediatrix Medical Group – MD
Sales – Berry Global – BERY

Thanks for your business and trust!

Sincerely,
The Sycamore Financial Group Team with Brent A. Yard, CFP®

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

By Sycamore Financial Group|2025-04-24T01:58:05-04:00April 24th, 2025|2025 Newsletter|0 Comments

Why We Focus on Risk First

Hello from Sycamore,

Once we understand your financial goals, we focus on the risk/return ratio of investments. Many of our new clients understand this to mean ‘high risk equals high reward,’ but it’s a bit more involved. At Sycamore, we believe that capital loss is a greater danger to your investment portfolio than return loss. Let that sink in as you consider this example.

You’ve invested $100,000 and have a great year earning 50%. Bravo! You are flying high, and the champagne tastes excellent. Next year, the markets will not be so sweet, and your investment will decline by 50%. Are you and your original $100,000 back to square one? Your average rate of return might appear to be 0% (+50% and -50%). However, when we run the numbers, a different picture emerges:

Year One: $100,000 plus 50% = $150,000.
Year Two: $150,000 minus 50% = $75,000.

In our example, your average rate of return was 0%, but your portfolio declined by 25%. That doesn’t seem fair, but it’s the way math works. Flash rates of return are an effective way to catch an investor’s attention but could fail to harness the full potential of every investment dollar in the long run. From an investment perspective, there’s only one bottom line:

It’s more important NOT to have a negative performance than to have a positive one.

High Risk/High Reward investors may label this as a conservative approach, but we do not. Every dollar lost is one dollar that will never work for you again. Warren Buffett – no slouch as an investor – said it best:

Rule 1: Don’t lose the money.
Rule 2: Don’t forget rule number one.

We’d like to be aggressive and win every time, but none of life’s endeavors work that way. In fact, most of us learn early on that we must hedge our bets for the smoothest ride. As we move up the risk/return graph, there comes a point where the risk is simply too significant – think of betting all you have on a single race at the Kentucky Derby. The odds are not in your favor.

If you lose your money, it just doesn’t make any difference how smart you are next year!

Our single objective here at Sycamore is to help our clients reach their goals. When you trust us with your money, our priorities are twofold: the safety of your capital and steady investment growth. We seek out companies and funds with established track records. We look for gains largely independent of the prevailing market winds. Some years will outperform others – bull and bear markets are a fact of life, and your portfolios will almost certainly lose money from time to time – but what we want to capture for you is a positive long-term performance.

Thanks for your business and trust!

Sincerely,
The Sycamore Financial Group Team with Anita Jay

*This article is distributed for general informational and educational purposes and is not intended to constitute legal, tax, accounting, or investment advice.

By Sycamore Financial Group|2025-03-10T20:02:53-04:00March 10th, 2025|2025 Newsletter|0 Comments

Fourth Quarter 2024 Commentary

Hello from Sycamore,

Notice

Recently, some of you may have noticed a small deposit to your account(s). These happen periodically and are generated from class action suits filed against companies that you now hold or have held in the past. We automatically file for these on your behalf and when the money is distributed (which is usually several years after the action is filed), we then credit your account(s) with any amounts you are entitled to.

Performance and the Markets

Another year has passed and for investors, 2024 was a very good year. Inflation seems to be under control or at least much better than 2022-2023 and the Federal Reserve Bank has started lowering interest rates. This bodes well for 2025 and we’re looking forward to the coming year.

Except for a few giant tech stocks, known as the ‘Magnificent Seven’, the markets appear ‘fairly’ valued in our opinion. Earnings continue to grow for most companies in your portfolio(s) and it’s easy to find great companies at what we feel are selling for rational prices. Supporting all of this is the growth of our economy. The Atlanta Federal Reserve Bank is now expecting Q-4 growth of about 2.4% annualized growth, and this follows a good third quarter of about 3%.

Our average 100% stock account gained about 11% (gross of fees) for 2024. Considering the performance we had in 2023, we’re very pleased. We normally look for an average of about 9% to 10%, so 11% is a plus year. Remember that when investing, there are two considerations – Risk and Return. Since you have entrusted us with your investments, we look at Risk first. If the Risk is too great, we simply don’t jump in no matter how shiny the stone appears. This philosophy has helped us outperform the S&P 500 index over the past 25 years.

The Economy

I mentioned above that the underlying platform on which businesses rely is the growth of our economy. We think the Federal Reserve Bank has done a good job of managing our economy during the past two years while they have been combating inflation. About two years ago the Federal Reserve Bank initiated something we’ve not seen before when they were attacking inflation. Not only did they raise interest rates, but they also reduced our money supply, which had grown sharply during COVID-19. This plan seems to have had the desired effect. We’ve slowed the inflation rate without pushing the economy into a recession. Speaking of recession, does anyone remember how a recession was all but assured when the Federal Reserve Bank started raising interest rates in 2023? We don’t hear much about a pending recession anymore and we feel the Fed should receive credit for what – so far – seems to be a soft landing.

We seem to be getting inflation under control (currently about 2.5% vs almost 9% in 2022), Auto sales continue to increase, the dollar remains strong, retail sales continue to grow, and we’re creating jobs (about 200,000 per month according to the Bureau of Labor Statistics), and unemployment is holding at about 4%. Housing starts have been declining, but we’re hopeful that this will improve as interest rates decline. On balance, we’re optimistic about the economy and share prices.

Purchase and Sale Activity During Q-4

Purchases – Cirrus Logic, Centene, Dentsply Sirona, and Siemens LTD.
Sales – United Natural Foods.

Thanks for your business and trust!

Sincerely,
The Sycamore Financial Group Team

*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 Sycamore Financial Group|2025-01-29T00:40:58-05:00January 29th, 2025|2025 Newsletter|0 Comments

Third Quarter 2024 Market Commentary

Hello from Sycamore,

Performance and The Markets

Let’s start with the good news! September is historically the worst-performing month of the year for the stock market, but not in 2024. Our composite gained a little more than 1.5% for September, it has gained a bit more than 27% for the last 12 months, and over the last 10 years, it has gained 224% or almost 11% per year. These have indeed been wonderful times for shareholders. We cannot see into the future, but for practical purposes, we believe the next 50 years will be like the past 50 years. However, over the next 10 years, we expect returns to be muted somewhat when compared to the past 10 years.

Let’s all take a moment to thank Adam Smith for promoting capitalism when our country was formed. Capitalism can be difficult from time to time and brutal occasionally, but it is efficient. As shareholders, capitalism (recessions included) is our friend. Our economy continues to grow, we’re creating more jobs, inflation is being tamped down, and interest rates have been reduced recently. There is always room for improvement and there are always ‘pundits’ sharing their version of doom (bad news sells, ya know), but we do not see anything on the horizon that will derail our economic growth or the stock market. Of course, the stock market can sometimes be emotional, so we’ll need to be prepared for the normal ups and downs. This is not 1999. We are finding many companies that can be purchased at what we feel are bargain prices.

The Economy

As I mentioned earlier, our economy continues to perform well. It appears that the Federal Reserve Bank believes inflation is under control enough to start reducing interest rates. A reduction of 0.5% was announced recently. Our gross domestic product – which recently has been revised upward by the Commerce Department – has been growing at a modest and steady pace of a little more than 2% since 2020. Housing starts are weaker than we would like, but auto sales have remained firm and are trending higher. We think the recent decrease in interest rates will help both industries. Job creation has slowed over the past year, but we still have created almost two and a half million new jobs over the last 12 months. Currently, we expect – and look forward to – more slow and steady growth from our overall economy. Thank you, Adam Smith.

Investors vs Speculators

Each fall we like to thank you for being investors and not speculators, and we like to remind you of our investment goals for your account(s) that are using our ‘Growth at a Reasonable Price’ (GARP) strategy. First, we work to deliver reasonably good returns. Second, through our ‘risk first’ analysis and broad diversification, we make a concerted effort to reduce risk and volatility in your portfolio(s) with us. The markets have been good for so long that it’s easy to forget about the risk side of investing, but we have not been trying to hit ‘home runs’ in the past and we have no plans to start now. We’ve learned over the years that additional risk can mean LESS return. We have no plans to place your capital at additional risk no matter how tempting the current ‘story’ is. Third, we do our best to keep taxes on your portfolio(s) as low as possible, but please remember that taxes are a secondary consideration…our first goal is to earn profits.

Purchase and Sale Activity During Q-3

Sales: Stericycle (SRCL), Sirius (SIRI)
Buys: Nice LTD (NICE), VeriSign Inc. (VRSN)

Thanks for your business and trust!

Sincerely,
The Sycamore Financial Group Team

By Sycamore Financial Group|2025-01-29T00:40:33-05:00October 22nd, 2024|2024 Newsletters|0 Comments

Certified Financial Planner Achievements

Hello from Sycamore,

We are thrilled to announce the recent achievements of two outstanding members of our team, Allison Rumschik and Brent Yard. Both Allison and Brent have successfully completed the rigorous coursework, passed the comprehensive 6-hour final exam, and have now earned the prestigious marks of Certified Financial Planners™.

The CFP® designation identifies individuals who have met the stringent experience and ethical standards set by the CFP Board. This includes the successful completion of financial planning coursework at an accredited college or university and passing an exam that covers a wide range of topics: Professional Conduct and Regulations, General Principles of Financial Planning, Risk Management and Insurance Planning, Investment Planning, Tax Planning, Retirement Savings and Income Planning, Estate Planning, and the Psychology of Financial Planning.

Certified Financial Planner™ professionals commit to acting as fiduciaries, which means they always act in the best interests of their clients when providing financial advice. Allison and Brent have demonstrated their dedication to this principle, showcasing their commitment to providing superior results for our clients, our industry, Sycamore, and themselves. We could not be prouder of the dedication and commitment they’ve demonstrated.

Sycamore Financial Group understands that each individual has unique financial aspirations. Consistently achieving these goals hinges on a close relationship with a trusted, knowledgeable financial advisor. With decades of experience in investment management and financial planning, our team is dedicated to strategically safeguarding and enhancing the assets of our clients. We prioritize three objectives for our client’s portfolios: delivering solid returns, minimizing volatility, and optimizing tax efficiency.

Our enduring relationships attest to the quality of service and tangible investment outcomes we provide. By comprehensively understanding your financial goals and objectives, we collaborate to craft a tailored plan that aligns with your specific investing, retirement planning, or college savings strategies. At Sycamore Financial Group, we are committed to guiding you toward financial success with expertise, dedication, and personalized attention.

Please join us in congratulating Allison Rumschik and Brent Yard on their impressive accomplishments and their continued commitment to excellence in financial planning.

Sincerely,
The Sycamore Financial Group Team

By Sycamore Financial Group|2024-07-16T18:20:26-04:00July 16th, 2024|2024 Newsletters|0 Comments

The Low Down on Retirement Accounts 2024

Hello from Sycamore,

If you are 73 or older and haven’t taken your Required Minimum Distribution (RMD) for the 2024 tax year, you will likely need to by year’s end.

What is an RMD?

An RMD is the minimum distribution you must withdraw from your retirement account each year.

When do I have to begin taking RMDs?

You must begin taking your RMDs on April 1^st of the year following the calendar year in which you reach age 73. What does this mean?

Example: Your 73^rd birthday was anytime in 2023. As long as you will reach age 73 by December 31, 2023, you must take your first RMD (for 2023) by April 1, 2024.

Then each year after this you must take your RMD by December 31 of that year.

Can I take more than my RMD amount?

You can withdraw more than the minimum amount required. The total amount you withdraw will be included in your taxable income.

Can I take withdrawals before 73?

Yes. Once you reach 59 ½ you may take withdrawals with no early withdrawal penalty. You will still be responsible for regular income tax on the complete amount withdrawn.

You may also withdraw funds prior to age 59 ½ however, you will likely need to pay an extra 10% early withdrawal penalty in addition to the regular income tax.

Highlights for 2024

Retirement Savings Plan Contribution Limits have changed.

401(k), 403(b), 457 plans, and federal government Thrift Savings Plan contribution limits are $23,000.
1. Catch-up contributions for those over age 50 are $7,500.
IRA contribution limits increase to $7,000.
1. Catch-up contributions for those over age 50 are $1,000.
SIMPLE IRA contribution limits $16,000.
1. Catch-up contributions for those over age 50 are $3,500.

As always, do not hesitate to reach out to our offices at (765) 455-1554 to discuss this.

Thank you for your continued trust and support,

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 Sycamore Financial Group|2024-07-16T17:02:20-04:00May 9th, 2024|2024 Newsletters|0 Comments

Second Quarter Commentary 2023

Hello from Sycamore,

Performance and the Markets

So far so good for 2023. Since the markets found a low point last fall, they have been steadily climbing. We are not back to the highs that we experienced at the end of 2021, but with the Dow Jones industrial average at about 34,000 now, we’re within shouting distance. From June 30th, 2022, our growth and income composite have gained more than 19%. We are pleased with these returns. We are also pleased that the pending recession – which according to many news outlets, has been just around the corner for about the last 18 months – still seems to be around that corner! That’s not to say that it isn’t coming, forecasting can be difficult. As Yogi Berra said, “It’s tough to make predictions, especially about the future”.

Because we do our own research and make individual stock selections for your portfolio(s), we are constantly evaluating several hundred individual securities based on their assets and profitability. Nothing is assured, but currently, we see most securities that we follow as being ‘reasonably’ priced. While we do not expect our composite to gain another 9% during the last half of 2023, we are comfortable with current valuations. We believe that in the long run share prices will follow the profitability of the company. With a few exceptions, the profits of the companies that we follow are progressing as we would expect.

The Economy

We recently received good news on the inflation front. The current annual rate has dropped to 3%, which is the lowest rate in more than two years. The federal reserve has recently slowed the pace of interest rate hikes, and they have indicated that one or two more .25% hikes will likely be all we’ll see in the near future. We feel the recent inflation news shows the rate hikes over the last year have been effective.

Producer prices, which at their peak in 2021 and 2022 were growing at nearly a 23% annualized rate, are now declining at about a 6% annualized rate. Generally, the producer price index is a good indicator of what to expect from the consumer price index. If history holds true, we could expect inflation to continue to subside.

In our March letter to you, we mentioned that the money supply in the economy (M2) was decreasing. That is still the case. This is another metric that leads us to believe inflation will continue to ease. The economy continues to create new jobs at a brisk pace and has created 1.67 million new jobs so far in 2023. The unemployment rate now stands at 3.6%.

We recently received good news about our first quarter gross domestic product (GDP). The estimate was revised up by .7% to 2%. It seems consumers are getting used to higher interest rates and sales of existing homes have bounced back a little while housing starts are showing signs of getting back on track.

Not everything is perfect, but the recent data showing the economy is growing more than expected and inflation is cooling faster than expected is not a bad combination. We’re optimistic.

Purchase and Sale Activity During Q-2

The second quarter had more activity than usual for our portfolios.

We bought Lincoln National, Bread Financial, Canadian Solar, Mednax Inc., Wintrust Financial, Generac Holdings, Verizon, M.D.C. Holdings, and Petmed Express.

We sold Neogen, Warner Brothers Discovery, Kaman, Organon & Co, ASGN Inc, China Automotive, New Orient Education, Consensus Cloud Solutions, Mueller IND, and Ziff Davis.

As always, do not hesitate to reach out to our offices at (765) 455-1554 to discuss this.

Thank you for your continued trust and support,

Sycamore Financial Group

*Data not audited
*Results reported gross 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 Sycamore Financial Group|2023-07-22T01:38:42-04:00July 22nd, 2023|2023 Newsletters|0 Comments

Performance, Markets and The Economy

Hello from Sycamore,

Performance and the Markets

Our Growth and Income Composite gained just a bit less than 0.5% over the past year (gross of all fees). This is significantly better than the -7.7% by the S&P 500. Historically our strength has been to hold value better during market declines and it seems to be true again during this market cycle. We still expect the markets to do reasonably well in 2023. We know that there is a lot of concern about a pending recession, but we’ve now been hearing that for more than a year and we’ve not seen it yet.

As you already know, we do our own research and analysis to make security selections rather than send your money to a 3rd party manager or mutual fund to be managed. This means that we are ‘in the weeds’ each-and-every week. Currently, we see most companies growing earnings at a rate we’d normally expect. Of course, there are exceptions, but on the whole, we are still finding many bargains and we’re looking forward to an uneventful 2023.

The Economy

One of the primary reasons that we are in a higher interest rate environment is inflation. It continues to be a problem and the Federal Reserve is continuing to raise interest rates – although the rate of increase seems to be slowing and we believe we are near the top for now. Producer prices continue to drop, and we’ve found that the Consumer Price Index tends to follow. We’re hopeful that inflation will ease significantly this year. Also, the amount of money in our economy (M-2) is now shrinking. We believe that this will slow the inflation rate. Many economic indicators are performing well. Retail sales continue to be strong, and the consumer is a very large part of our economy. The unemployment rate remains at near record lows and our economy continues to create new jobs at a very good rate. New orders for durable goods are strong and even sales of existing homes and new starts are staging a nice recovery. We remain optimistic overall, and we believe that most companies can operate profitably in our current economic environment.

Purchase and Sale Activity During Q-1

During the 1st quarter of 2023, we bought Generac (GNRC), Paychecks (PAYX), IBM, ASGN, and ADP. We sold Sally Beauty (SBH).

As always, do not hesitate to reach out to our offices at (765) 455-1554 to discuss this.

Thank you for your continued trust and support,

Sycamore Financial Group

By Sycamore Financial Group|2023-04-26T22:13:02-04:00April 26th, 2023|2023 Newsletters|0 Comments

Consider Reviewing Your Insurance Package

Hello from Sycamore,

Insurance is a way to transfer risk from you to a larger group of people through a firm, the insurance company. For example, many people choose to insure against potentially bad outcomes that could be catastrophic like the death of the family earner in the case of life insurance or large unexpected medical expense through medical insurance. On the other hand, you may not choose to have collision or “full coverage” insurance on your $3,000 extra vehicle. Assuming a collision in which you walk away just fine but the car is totaled, the $3,000 loss may be something you can live with.

There are many forms of insurance: life, medical, homeowners, auto, disability, malpractice, and many more. All insurance has a time and a place. For example, we often review what, if any, life insurance you may have during our annual reviews. Life insurance can be a handy tool that you purchase when you need it but at times, we find that there are still policies in force that may not be needed anymore. On the other hand, we sometimes see situations where people are not insured to the extent that possibly they should be in areas like long-term disability or personal liability insurance.

Having the necessary insurance for your individual circumstances can be an integral part of your overall financial plan. It’s important to meet with your insurance agent periodically to review your overall insurance package to see where you may be over or under-insured. Of course, we would be happy to give you some general insurance guidance as well if you have any questions as you review your coverage.

As always, do not hesitate to reach out to our offices at (765) 455-1554 to discuss this.

Thank you for your continued trust and support,

Sycamore Financial Group

***This article is distributed for general informational and educational purposes and is not intended to constitute legal, tax, accounting, or investment advice.***

By Sycamore Financial Group|2023-02-14T01:21:22-05:00February 14th, 2023|2023 Newsletters|0 Comments

Contribution Limits Changing

Hello from Sycamore,

Retirement and health savings plan contribution limits will be changing for the upcoming year. Here is an overview of what you need to know:

401(k), 403(b), 401(a), 457, and federal government Thrift Savings Plans contribution limits will be increased by almost 10% to $22,500.
a. Catch-up contributions for those aged 50 and over will be increased to $7,500 making the total contribution limit $30,000 for the year.
IRA contribution limits will be $500 higher and moved to $6,500.
a. Catch-up contributions for those aged 50 and over will remain the same at $1,000 making the total contribution limit $7,500 for the year.
SIMPLE IRA contribution limits will be raised by $1,500 to $15,500.
a. Catch-up contributions for those aged 50 and over will be increased to $3,500 making the total contribution limit $19,000 for the year.
SEP IRA contribution limits will be moved up to $66,000.
a. SEP IRAs do not allow for catch-up contributions.
Health savings account contribution limits will be higher at $3,850 for individuals and $7,750 for families.
a. Catch-up contributions for those aged 55 and over will remain the same at $1,000 making the total contribution limit $4,850 and $8,750 for the year

We encourage you to forward this email or share this information with anybody that you feel it could benefit. And as always, do not hesitate to reach out with any questions or concerns.

As always, never hesitate to contact us with any questions or concerns.

Thank you for your continued trust and support,

Sycamore Financial Group

***This article is distributed for general informational and educational purposes and is not intended to constitute legal, tax, accounting, or investment advice.***

By Sycamore Financial Group|2023-04-26T22:14:42-04:00November 18th, 2022|2022 Newsletters|0 Comments