Client Newsletter: December 31, 2016

Hoover Financial AdvisorsJanuary 15, 2017

Clients Newsletters

I think we all agree that 2016 was absolutely not a boring investment year!  After a difficult equity market in 2015 whereby most stock investors lost money, we entered 2016 full of hope and promise of a better year, but it certainly did not start as expected!  The massive stock selloff, due to China’s economic slowdown and plunging oil prices, resulted in a loss of 10.5% for the S&P 500 at its low point in mid-February. Even though this was not labeled an official “correction,” it certainly made most investors very anxious and concerned. 

As our office has continued to emphasize, clients should not invest for the short term, and long-term investors who maintained their investment were handsomely rewarded: The resilient Dow closed 2016 more than 4,300 points above its January low of 15,451. A post-election surge, built around Trump’s stimulus promises, has carried the Dow almost to 20,000 for the first time.   Even though  2016 had many different market-moving events (Brexit, ISIS, Trump Victory, etc.), which made stock markets move up and down very quickly,  overall US stocks had a very good year with the Dow Jones Industrial Average of 30 blue-chip stocks increasing 13%, the S&P 500 up 9.5%  and the Nasdaq Composite added 7.5%.  

Bond investors also experienced a seesaw year.  The 10-Year Treasury note started the year at 2.09% and ended the year at 2.42%.  Year over year, that increase does not seem very large considering the Federal Reserve raised the short-term lending rate by .25% in December 2016. However, the year was certainly not dull as the 10-year dropped to a low of 1.37% in July and then rocketed to a high of 2.60 in mid-December.  Generally, interest rates do not move up or down very quickly and bond investors left 2016 a bit confused.  Both US bond indexes we follow (Barclays US AGG Bond index, -up 2.65%, and Municipal Intermediate 5-10-year index, down .45%) had a difficult time keeping up with the volatility.

A few other interesting facts- US Value stocks substantially outperformed growth stocks in 2016.  The opposite occurred in 2015, where growth stocks did better. This is why we hedge our clients’ portfolios by generally having an equal concentration to both growth and value securities. 

The big winners last year were small and mid-cap US stocks.  Both of these asset classes substantially outperformed large cap securities.  As you may remember, we added mid-cap securities to our clients’ portfolios last year and have been increasing allocation to small cap over the last few years. Obviously, this strategy has helped our clients’ returns in 2016. 

If you have any questions or concerns about your portfolio, please do not hesitate to contact our office and a member of our investment team will be happy to answer them for you.

Tamarac Dashboard Changes

If you have recently logged on to your Tamarac client portal, you will notice a completely redesigned dashboard that is cutting-edge and presents financial information in a way that is easy to understand and navigate.  The new look is streamlined with added functionality and more data at your fingertips. You will notice the new tile features provide more interactive data. We feel that the new look is more user-friendly, modern and will give you all the information you are looking for as soon as you log in. If you have any questions about the changes to your client portal or you have additional information you would like to see, please feel free to contact Kelly Hoover (x120) or Amy Keller (x103) to further discuss your data needs.

New Financial Planning Software

As mentioned in our year-end blog, we are always looking for ways to enhance our client experience and ultimately all of the services you receive from us!  We are excited to announce that we have partnered with eMoney, an industry leading provider of financial planning software.  Throughout 2017, we will develop  new and interactive ways to deliver financial plans (and update existing ones) for our clients and prospects.  We look forward to showcasing all of the tremendous features of eMoney because you deserve the best! Be sure to ask your advisor about it at your next review meeting!

The HFA Team Continues to Grow

We are very excited and pleased to welcome Robert (Rob) Dowd to the HFA team.  Rob has joined the financial planning team as a Financial Planning Associate.  His main responsibilities are to support the firm’s financial planners in all facets of the planning process. He will be working diligently in our new financial planning software, eMoney, to continue to enhance the efficiency of HFA financial plans.

Rob was previously with Kelmar Associates where he held a Research Financial Associate position.  He graduated from Widener University with a Bachelor of Science in Business Administration and is currently pursuing his Master’s in Business Administration, Taxation and Financial Planning.  Rob will eligible to sit for the CFP® exam this summer.  We look forward to you having the opportunity to meet and work with him!

Contact Information:

Robert Dowd:  Phone: 610-651-2777, Ext. 128 and Email: robert@petehoover.com

Tax Time

Tax time is quickly approaching and our office will be preparing tax returns for HFA clients.  If you had your tax returns completed by our office in the past, we will send your tax organizer in the mail to help you assemble the appropriate information.  If you would like to become a new tax client and have our office prepare your return this year, please contact Carol Olver at 610-651-2777 x106.

Schwab 1099s are expected to be mailed by February 20th. However, you do not need to wait until those documents arrive to mail your tax data to our office.  We have electronic access to all of your necessary Schwab tax data at our office.  Please make sure all of your tax data is mailed to our office prior to the March 15th tax deadline to avoid late preparer fees. 

HFA’s Lunch and Learn Series

In 2016, HFA presented four lunch and learn meetings throughout the year.  We look forward to offering the same quality educational seminars this year with some new and fresh topics! Please let us know if you have a topic that might be of interest to you or others and we will try to put it on the schedule.  Look for more information on this program in a future mailing.
Please notify us if there has been a change in your personal financial situation, employment status or family situation.  We thank you for the confidence you have placed in our team and look forward to continuing to be of service to you in the future.  Please let us know if we can be of any help at any time. 

Best Regards,

Peter K. Hoover, CFP®