Mid-March Newsletter

Mid-March Newsletter

by Tim Guthrie on Mar 29, 2019

Market Update

The stock market has continued to shine, recovering our losses from last quarter. On average we are up 13% YTD through Feb 28th. This figure is net of fees. This is beating the S&P 500, and we are on average only about 80% stocks, so we have less risk too. Over three years, after all fees we are averaging gains of 12.3 % per year. This too is an excellent result. As I write this (March 19, 2019) we are likely up about 15% on average, though my performance reporting system can’t produce official results until the month has ended.

What I do think moving forward? I think that with low inflation, low oil prices, low taxes, low interest rates and super low unemployment, the economy can continue to grow for some time. In the US, consumer spending is 70% of the economy. With employment this high people will spend. If people spend, then US businesses will do very well. I think it is just that simple. “What if growth slows down?” some ask. If economic growth slowed down some that would be fine. This is because the stock market loves moderate growth since it reduces the risk of inflation and the risk that the Federal Reserve needs to raise rates. Globally, I still think the USA is the best developed market to invest in based on the strong economy. We have some international exposure, but I am focusing on the US.

There is always risk, always something that could upset the apple cart. We must live with that and adjust your accounts to reflect your risk tolerance, but long term being TOO CONSERVATIVE is very risky because you end up with 10% - 50% less growth than what you could be earning. That gets expensive; it is much more costly than a typical short lived 15% market decline.

Our investment themes remain the same. Though in areas where we have had excellent growth, I am trimming the gains, so the risk level does not rise too high. I am starting to do that with older or more conservative clients first. For example, ETILX (the EVENTIDE Gilead Fund {an excellent mid-cap growth fund}) is up 28% for the year. If I started you at a 10% allocation in that fund, it is now about 12%. I can sell a small portion of the fund, get you back to 10%, and re-invest the profits back into lower risk stocks or even fixed income. The goal in this is to prevent risk from creeping up too high while still seeking growth.

What are our investment Themes? Targeted allocation to stocks of medical device firms (knees, hips, pacemakers), mid cap growth companies, software firms, early stage biotech and industrial automation. We blend these sectors with ‘blue chip’ or dividend stocks, REITS (real estate stocks), mortgages (instead of bonds) and even a little bit in commodities. Risk is managed by controlling the proportions allocated to the various sectors with more conservative clients receiving smaller allocations of the growth oriented but somewhat riskier ‘growth themes’ and larger portions invested into dividend stocks and mortgages.

New Bullseye Office and Advisor

We now have an advisor serving Northeast Ohio. Greg Spickard has joined our firm and has opened an office in Hartville Ohio. Greg was the founder of Summit Retirement Plan Services, a regional 401k plan administration firm. Prior to starting Summit Retirement Plan Services Greg worked for Charles Schwab plan services. Greg has over 20 years of experience with 401ks and similar plans, and now brings his expertise to our clients and prospects in the Akron, Cleveland, Youngstown areas. He will be working with Dave Ramsey SmartVestor prospects and clients, and others providing his expertise and guidance along with our very competitive investment portfolios. Greg learned of this opportunity as he has been a Bullseye client for over 15 years. After selling his retirement plan administration business, Greg was looking to stay connected professionally with ‘the retirement planning’ process, having seen how regular folks create real wealth with a good plan. Tim is thrilled to have Greg join him and be able serve folks in his region. Tim and Greg have been known to spend a few weekends cycling on roads or dirt trails together in a fruitless attempt to pretend they are not getting older and slower.

 

Greg is open for business his contact information is below:

His office address is:
734 Marbury Circle NE
Hartville, OH 44632
Phone: 330-472-3717
Email: greg@bullseyeinv.com


The Contract Fee Addendum

Thank you for all your help with the monthly fee calculation addendum. We had a few issues. I appreciate your understanding. We used our DocuSign account from TD and this resulted in some confusion. Despite what DocuSign may have said, none of you are being moved to email statement delivery or electronic document delivery. Overall this project is about completed, and I appreciate your help. As a reminder, the change to calculate and charge fees monthly from quarterly is not a fee increase. If you have any questions contact Vickie Corpuz, office manager at 513-805-8344.

This addendum only applies to Bullseye clients who opened accounts prior to this year.

Upcoming Initiatives

As mentioned before, this summer we will begin a formal process of updating our financial information and investment policies for all clients who have been with us over three years. The goal is simply to make sure we are still providing the type of investment management that best meets your needs. This will require we gather information on your net worth, investment goals, risk tolerance and time horizon. This information will be kept confidential. Over time situations change and we just need to make sure we still understand your financial position and needs. We will also likely use an email type form or system to update this information, at least in part. Remember, if your situation, goals, needs, or risk tolerance changes, let us know.

Notes on Performance or Results Discussion

When I discuss ‘average investment results’, it may not be indicative of your results. Your account could have less risk or be riskier that average, and the last 4-5 years more risk has equaled more results. Also, if you invested 16 months ago, the 3- year result is not as useful to you because you missed 20 of those months, and with 2018 being a negative year results wise, missing the ‘good year’ of 2017 changes your prospective. Understand that if you have a more conservative account, your results will often be lower compared to others, but you are trading those possible results for less risk overall and perhaps more consistent results. If you have a riskier account, then over time you should expect better than ‘average’ results. Over time I may be able to break down different groups in a ‘compliant’ way, and report performance by risk level or allocation. Also know if you have not been with Bullseye for very long, over time, these reports will become more relevant once you have been through more market cycles and more calendar quarters.

How to Reach us

Mailing address: P.O. Box 123, Milford, OH 45150
Main Office: Tim Guthrie, CFP, 431 Ohio Pike, Suite 214, Cincinnati, OH 45255
Tim@bullseyeinv.com
513-774-3325 (Main/cell)
937-377-1234 (east of Cincinnati)

Ashland KY Office: Tim Guthrie, CFP, 1505 Carter Ave., Suite 300, Ashland, KY 41101
Tim@bullseyeinv.com
606-939-1196 (Ashland KY)
513-774-3325 (Main/cell)

NE Ohio Office: Greg Spickard, 734 Marbury Circle NE, Hartville, OH 44632
Greg@bullseyeinv.com,
330-472-3717

Office Manager: Vickie Corpuz
service@bullseyeinv.com
513-805-8344
800-401-3513 (fax)