Do you listen to podcasts?
It’s a good way to pass the time in your car, relax and maybe even learn something! Morgan Stanley is currently on their third season of podcasts focusing on the world of finance, technology, human interest and beyond.
All of the episodes can be found at this site: https://www.morganstanley.com/ideas/morgan-stanley-ideas-podcast . There are also options to subscribe to the podcasts through iTunes or Google Play.
Check them out and let us know what you think!
Bob’s mom recently asked him if our phones have been ringing off the hook. Happily, they have not. Thank you for that.
We know volatility, especially downward volatility, is unsettling. Bob and Jason just returned from a conference and came away believing the equity markets are adjusting to rising inflation and interest rates and slower earnings growth. We think this adjustment is mostly, but not completely, done in percentage terms and that it could continue into January. We do not believe we are heading for a deep or extended recession. Some slides from our Global Investment Committee, illustrating these views can be viewed here: GIC Market Slides
Mostly, we want you to know that we are here for you. We’re looking at our risk, attending to cash flows, and making sure we’ve got things the way we’ve discussed. The volatility may continue and if you find that upsetting, let’s do something about it together. Call Barbara, Jason or Bob anytime if you need some conversation.
We certainly understand your wondering if the long term trend in equity markets has changed over the past few days and asking, “Should I sell?” We don’t know, of course, where markets go in the short-term. But we do know that in volatile times it’s tempting, though usually counter-productive, to let emotions replace rational analysis.
For The Jeffrey | Chamberlain Group, investing is a long-term endeavor. We believe the business cycle is still in growth mode, earnings are rising at a nice pace and inflation is manageable. If we have allocated portfolios properly – understanding each of your risk tolerances, time horizons, and cash flow requirements - we think we should apply the same analysis to risks and returns today as we did before the recent selloff.
As Jason likes to say, “You need to have your umbrella before it starts raining”. In other words, we make every effort to create portfolios for you, with proper margins of safety that answer the “should I sell” question before it is even asked.
We have reviewed portfolios and are generally happy with holdings. Nevertheless, as we usually do in Q4, we will look at each holding as well as our allocations and advise you about possible improvements as we see them.
PS: The Sunday Washington Post Business section carried three articles we found useful. While we are avid readers of the Post, it’s far from our main source of business news and commentary. But the columns by Allan Sloan, Michelle Singletary and Thomas Heath were worthwhile. (On Wednesday, while stock prices seemed to be in free fall, Singletary was in a classroom led by Wharton’s Jeremy Siegel, author of Stocks for the Long Run, 5th edition. How cool is that?)
On September 28th the Global Industry Classifications Standard (GICS) structure will undergo its most significant modifications since its introduction by S&P Dow Jones Indices and MSCI in 1999.
Many of you will ask “so what?”, “does this affect my portfolio?” or “do I have to do anything?”
These changes are getting some media attention, so we thought we would share a recent Morgan Stanley research report with some of the details. We do not believe there should be any increased volatility or adverse effects as a result of these changes.
Does this affect my portfolio?
ETF providers expect little market impact and insignificant tax effects due to the rebalancing. Vanguard, State Street, BlackRock and Fidelity will rebalance portfolios in the coming months to align with the new classification system. Market participants whose portfolios are designed to mirror the sector composition of the S&P 500 and MSCI indices tied to GICS sectors may want to review this in detail to ensure allocations remain aligned with their objectives.
Do I have to do anything?
Not at this time. The changes are consistent with our view that there may be a shift underway from Growth to Value in large cap US. We have been reviewing our current holdings which are directly impacted by this change and are making updates as we determine to be necessary. As ever, we will be happy to discuss with you how we use indices and sectors on your behalf in our day-to-day decision making and advice.
Upcoming Changes to Global Industry Classification Standard
We are excited to introduce two new team members to you! Maggie Ferguson joined us in June as a Client Service Associate and Fuhler Pomeroy has been our research intern for the past 6 months. Read the announcement in the link above.
We are happy to announce that our team name is now The Jeffrey | Chamberlain Group at Morgan Stanley. Please click the link above to read Bob's email announcing this exciting change.
As you know, we enjoy attending the annual Baron Conference in NYC and regret missing it last year due to a scheduling conflict. We finally got around to reading Baron’s Dec. 31 report and thought it would be worth calling to your attention. Pp. 1-2 talk about the event itself and how you can order complimentary souvenir tee shirts (mine just arrived). Pp. 7-10 includes a text of Ron Baron’s speech “Disruption”. Both are easy and interesting reads and include funny anecdotes and slides. It concludes with some inspiration from Robert Kennedy.
Meanwhile, our schedules look open for this year’s conference and we are looking forward to it.
Rons Letter 12.31.17
Tax season has officially ended for most of us and we hope it wasn’t too much of a stressful time for you. We can say that we are happy its over! We wanted to share this article from Kiplinger about Qualified Charitable Distributions and how they can be used strategically under the tax law that began this year. This may be particularly meaningful to those who are charitably inclined and also required to take minimum required distributions (MRDs) from their IRAs.
If you would like to discuss this article in more detail please let us know.
QCDs: Use This Tax Strategy to Get More From 2018 RMDs
This is a short read from Brian Wesbury at First Trust about recent economic data and what they mean. We thought you would be interested in Wesbury’s conclusion that the US economy is accelerating. Please take a look.
Stay Invested Economy Looks Good
In honor of American Heart Month we would like to share this inspiring story from our client and friend Gary Rosenbaum. Gary received a heart transplant in 2015 and now competes in the World Transplant Games. He is committed to spreading the word about the importance of organ donation and transplants and we are honored to share his story with all of you.
To quote Gary: “Every day is a Gift and I want to live it to the fullest”
This is something many of us take for granted and its good have a reminder from time to time.
We are excited to announce that Bob and Jason have been named to Morgan Stanley's prestigious Master's Club, an elite group composed of the firm's top Financial Advisors.
Please view the press releases to learn more.
Jeffrey Press Release
Chamberlain Press Release
Bob and Bach Jeffrey have been chosen as the Community Foundation of Howard County’s 2017 Philanthropist of the Year Award recipients!
The Jeffrey Group is pleased to announce that Jason Chamberlain recently added Morgan Stanley’s Corporate Retirement Director designation to his list of accomplishments. Only two percent of the firm’s Financial Advisors have qualified for this achievement. Earning this designation required in-depth study of the design, installation, maintenance and administration of retirement plans. The Corporate Retirement Director designation recognizes individuals who, as part of their team’s practice, focus on helping corporate clients manage their retirement plans. We are proud of Jason for having attained this CRD designation.