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2017 Mid-Year Review and Outlook

By July 11, 2017September 16th, 2023No Comments

Highlights of this Mid-Year Review and Outlook:

  1. Now is the time to schedule your personal mid-year review.
  2. A 5-business day notice is suggested when you know you will be in need of a withdrawal from your investment account(s).
  3. 3 suggested steps to help you protect your financial accounts.
  4. Major U.S. stock indices end the first half on a positive note.
  5. We reduced stock/equity exposure for all accounts in the second quarter.
  6. We are looking for longer maturity fixed income assets to be in favor for the second half.
  7. Market volatility remained near historic lows in the second quarter.


 Mid-Year Personal Review-from Rick Jurrens, CFP®, CLU, ChFC:

I am back to normal after my surgery and ready to meet with you for your personal “half time” review! Call today and schedule your mid-year review and planning update if you have not already done so.  We realize your summer schedule may be in full swing, but we now have the option for you of an in-office personal review or a review with the “Go-to-Meeting” system remotely from anywhere you can access your computer, tablet, or even mobile phone on a real-time basis.  This is a great time to review your overall planning goals, objectives, and investment portfolios.  Call us today!

Operations Reminder-from Chris Jurrens, CFP®

Just a friendly reminder:  In order for us to serve you best, we ask that you give us at least a 5-business day notice on all distribution requests.  We know there are times where it cannot be helped when an unexpected need for funds arises, and we completely understand.  If you need cash and know in advance, we ask that you give us a “heads-up” so we can liquidate the funds in the most efficient manner possible.

Three Steps to help Protect Your Financial Accounts:

Back in 2013, 40 million Target shoppers were notified that their payment card information was stolen by hackers in one of the most infamous data breaches ever. The following year, 50 million Home Depot shoppers received the same alert. Last year, there were 980 reported data breaches exposing over 35 million personal records—many including payment card information and Social Security numbers. It’s very possible that some of your information was exposed in one of these many breaches. But not all is lost. Adopt these three Hack-Proof resolutions to keep your money and credit safe:

  1. Create a Separate Email Address for Your Financial Accounts

Our personal email addresses have become a key to our lives on the Internet. We enter them into countless databases when we sign up for newsletters, create new accounts, and order items online. We don’t think twice about it.  But if we use that same email address for our online banking and credit card accounts, we’re putting our finances in danger. If one of those various databases is hacked we’re essentially handing half of our financial account credentials over to the hackers.  Make the hackers’ job harder by creating a “financial-only” email address that you use just for your online financial accounts. This secret email should not reveal anything about you. Make your username (the part before the @ sign) something generic that does not reference your name, initials, or other identifying information. Of course, create a strong password an on your account as well.

  1. Set Text or Email Alerts for Bank Accounts and Credit Cards

What if you could know exactly when money was leaving your accounts like the banks and credit card companies do? You could catch fraud as it is happening and limit your losses. You can do this, actually. Most major banks and credit cards allow you to sign up for text or email alerts that are sent to you anytime money leaves your account or a charge is pushed through. If you receive an alert for a purchase or withdrawal that you did not make, you know right away to contact your financial institution and alert them of the fraud.  You can even set alerts like this within your MyWealth website based on all the accounts that have been linked to automatically update on a daily basis.

  1. Consider Putting a Security Freeze on Your Credit Files

One of the best ways to protect your credit and finances is by freezing your credit file. By default, our credit files at the big three credit bureaus—Experian, Equifax, and TransUnion—are set to open. That makes it easier for you to obtain new credit, but it can also leave a dangerous hole in your security.  A credit freeze, also known as a security freeze, closes that hole by locking your credit file with a PIN that only you know. To apply for new credit or access your credit file, the freeze needs to be lifted with that PIN. This is more secure than the credit monitoring that most companies offer after a breach. Credit monitoring will simply alert you after credit has been opened in your name—you still have to clean up the mess. A credit freeze stops that from happening.

To freeze your credit, you need to contact all three of the credit bureaus—Experian, Equifax, and TransUnion. The price of a credit freeze varies per state but is usually around $10. Freezing your credit at all three bureaus will cost around $30. This fee is waived for proven identity theft victims and more states are beginning to offer the service to everyone for free.

The Markets:

The major U.S. stock indices slowed their rise in the second quarter, with the Dow Jones Industrial Average gaining 3.32% for the three months ending June 30th.  The broader Standard & Poor’s 500 stock index rose 2.57% in the second quarter.  For the first 6 months of 2017, the Dow was up 8.03% and the S&P 500 8.24% higher. (MarketWatch)

Interest rates were little changed in the second quarter, with the yield for the 10 year U.S. Treasury ending at 2.31% on June 30th, down .09% in three months.  At the beginning of 2017, the yield was 2.45%. (U.S. Treasury) Rates have risen since June 30th, with mortgage rates also moving higher over the past week.  The current average rate for a 30-year fixed mortgage now stands at 4.16%, with the 15-year fixed rate at 3.37% (

The price of a barrel of oil ended the first half at $46.33 compared with $53.89 to start this year, while gold closed out the first six months of 2017 at $1,242.25 per ounce, up $83.15 per ounce since January 1st.  (CNBC)

Stock market volatility has remained very low this year as measured by the Volatility Index, or VIX. An end-of-June Wall Street Journal story started out this way. “Stock market volatility is near an all-time low…”   On June 9, reported that one key measure of volatility fell to its lowest reading since late 1993. That low came just after former FBI Director James Comey’s much-anticipated testimony before a Congressional committee. Viewed through the narrow lens of the market, investors just didn’t seem to care.

But boring shouldn’t necessarily be viewed negatively. The Wall Street Journal also pointed out that several major global indexes had their best first-half performance since 2009.  We also see the lack of downside action in the weekly movements of the broad-based S&P 500 Index, which is a measure of 500 large U.S. companies.

There have been several reasons for the complacency, including an economy that isn’t rocking the economic boat, an expanding global economy, a Federal Reserve that continues to signal gradual rate hikes, and global central banks that remain in a very accommodative mode (though the European Central Bank has hinted it may eventually shift gears).

One other reason—the lack of stress in the financial system.  Financial stresses became a big issue in the 2008 financial crisis, when credit market seized up and lending among banks and other institutions nearly broke down.  In the aftermath of the crisis, arguments arose over how to monitor developments in the financial markets.  One tool is the St. Louis Fed Financial Stress Index©. It’s hardly a household name, but it is designed to measure stresses that may be building in the financial system.  It is a compilation of 18 weekly data series, including those that measure lending in the credit markets, volatility of stock prices, and how investors view risky debt such as junk bonds.

As highlighted in Figure 1, conditions are quite easy and are near the lowest levels seen since the recession ended.

Some will argue that complacency precedes volatility, and a more serious downturn in stocks is eventually inevitable.  We have experienced four downturns in the S&P 500 that were greater than 10% since 2010 per St. Louis Fed data. However, in the context of an expanding economy, stock market corrections have historically been viewed as temporary and healthy for the market. That has been the case for such downturns since 2010.

Our Outlook-from Sam Jurrens, CFA, CFP®:

Equity markets have remained relatively stable, keeping volatility subdued near all-time lows as mentioned above. We continue to be optimistic yet cautious. Our fixed income exposure remains favored towards long duration securities. We believe the recent rise in rates over the last week could help us continue to gain exposure to long duration bonds. The Fed most likely will continue raising rates gradually, which should continue to lead towards a flatter yield curve. No recession appears imminent at this time, which should allow the Fed to continue justifying further rate hikes.

Portfolios were previously favoring short-term and floating rate bonds to take advantage of the rate environment in the first quarter; however accounts have since focused almost entirely on long-duration fixed income for now.  All risk levels continue to hold individual equities, but portfolios have since lost all broad allocation exposure to equities through mutual funds. Given this overweight in long-term bonds, it will allow the majority of portfolios to appear rather conservative, especially when comparing your past risk numbers. We do not predict any catastrophic decline for stocks any time soon; we simply favor bonds over equities at this point in time. We would anticipate maintaining this stance into the end of the year, but we will adjust accordingly should the environment change to favor other assets.

 Long-term investment plans, i.e., a financial roadmap, take unexpected detours into account. Markets never move up in a straight line, but those who try to successfully time the short term ups and down in stocks rarely find such moves to be profitable over the longer run.

If you have any questions or thoughts, please call us at any time. We appreciate the privilege to serve all of you and look forward to working together in the years to come.

God Bless,

Your TEAM at F.I.G. Financial Advisory Services, Inc.


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All items discussed in this report are for informational purposes only, are not advice of any kind, and are not intended as a solicitation to buy, hold, or sell any securities. Nothing contained herein constitutes tax, legal, insurance, or investment advice.

Stocks and bonds and commodities are not FDIC insured and can fall in value, and any investment information, securities and commodities mentioned in this report may not be suitable for everyone.

U.S. Treasury bonds and Treasury bills are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Past performance is not a guarantee of future performance. Different investments involve different degrees of risk, and there can be no assurance that the future performance of any investment, security, commodity or investment strategy that is referenced will be profitable or be suitable for your portfolio.

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.

Before making any investments or making any type of investment decision, please consult with your financial advisor and determine how a security may fit into your investment portfolio, how a decision may affect your financial position and how it may impact your financial goals.

All opinions are subject to change without notice in response to changing market and/or economic conditions.

1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly.  Past performance does not guarantee future results.

3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly.  Past performance does not guarantee future results.

5 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.

6 London Bullion Market Association; gold fixing pricing; Prices can and do vary; past performance does not guarantee future results.

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