February 2017 – Market Commentary

February 2017 – Market Commentary

Disclaimer:  These are the views of Summit Financial Consulting and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

 

Special Tax Notice:  If you only have IRA or 403(b) investment accounts, you can most likely submit your tax return now if you received your 1099’s.  If you own a non-qualified (non-retirement) investment account, it is prudent to wait until March 15th to complete your tax return because it is always possible a revised tax statement will be sent out.

Reminder: If you would like our tax preparation firm, Summit Tax Services, to prepare your taxes, please let us know and we’ll walk your investment tax documents down the hall for you for preparation.  If you would like to receive a quote to see how much we can save you, please give our office a call at (586) 226-2100.  Some clients have saved over 50% versus last year’s tax preparation bill.  We can mail you an envelope to send in your documents, or we can send you an encrypted document request e-mail for security. 

 

Stocks and Bonds Both Rally To Start 2017

In our previous market commentaries, we mentioned that we felt bonds had good potential to grow after the setback that occurred because of the election.  We’re delighted to say that both stocks and bonds have rallied so far this year.

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January 2016 – Taxes, Healthcare, & Market Commentary

January 2016 – Taxes, Healthcare, & Market Commentary

Disclaimer:  These are the views of Summit Financial Consulting and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.


Tax Update, Healthcare Update, and Market Commentary

As 2017 begins, we wanted to inform you about two new opportunities, and also give you an update on what we expect in 2017.

First, most people can agree that gathering up their investment tax documents each year and making sure you have it all in order at tax time can be annoying.  We’re happy to announce that effective January 1st, Summit Tax Services is open for business onsite with full tax preparation capabilities, and we can simply walk your investment tax documents down the hall for you.  We have a team of CPA’s that will prepare and also double check each and every tax return to help ensure all deductions and credits are realized.  All our CPA’s have at least 20 years of experience on average.  Many clients will only pay $99 for full tax preparation, which includes federal, state, city, and electronic tax filing.  If you have additional forms or schedules the cost may be more, but our goal is to reduce your current tax preparation expenses by at least 15%. We would be happy to send you an envelope to mail us your materials at our expense.  We are also happy to review your last two years’ tax returns at no charge to check for errors or missed opportunities.  Please give us a call today at (586) 226-2100 to schedule your tax meeting as we believe our schedule will fill up fast.  You can also call or e-mail us at info@summitaxservices.com to request an envelope to mail your tax documents to us so we can handle the tax prep over the phone.  We also accept electronic documents, which speeds up the process.  Please let us know if there is anything we can do to make tax time easier and less expensive for you!  Disclaimer:  The Wink family owns both Summit Financial Consulting and Summit Tax Services, so they will receive some compensation as a result of this referral to Summit Tax Services.
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December 2016 – Market Commentary

Disclaimer:  These are the views of Summit Financial Consulting and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.


Portfolio Update and Market Commentary

To say that this year, and really the past 15 months, have been volatile is an understatement. Our co-founder Bob Wink has said repeatedly that the past 15 months, and particularly this presidential election process, has been the most difficult one to predict in his nearly 30 years in the industry because of all the uncertainty. The good news is that we expect things to get back to normal now that the election is behind us.

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Presidential Update & Market Reaction

Presidential Update & Market Reaction

Disclaimer:  These are the views of Summit Financial Consulting and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.


Presidential Update & Market Reaction

The past week’s events have been unprecedented for several reasons. First and foremost, of course, Donald Trump was elected President in a stunning upset. At one point, 100% of economic predictions we reviewed predicted that if Donald Trump was elected president, the stock market would crash and the bond market would rally higher (http://www.marketwatch.com/story/the-stock-market-could-crash-if-donald-trump-is-elected-2016-10-31). After Trump was closing the gap with Hillary Clinton in recent polls, the stock market went down 9 days in a row.

On election night, like many Americans, we stayed up to see the various state’s results and saw the S&P 500 trade down 5% in after-market trading. Bonds were trading 2-3% higher at that time as investors rushed to safety. By the end of the week the markets flipped, resulting in an unlikely stock market rebound and then bonds, generally considered a safe harbor investment, had one of the worst single weeks in history.

Last week, our models pointed to a high probability of a Donald Trump victory ahead of time. We reviewed a large amount of survey data and we found that polls conducted by human beings showed a large percentage of undecided voters. In the past 20 years of elections, the undecided vote was close to 3%. Polls conducted by human beings this election showed over 10% of voters were undecided. However, in polls conducted by automated computers, where a potential voter only had to press 1 for Hillary and press for 2 Trump, it showed much better results for Trump and a much lower percentage of undecided voters. This showed that many people were too shy to tell another person they favored Trump, and this resulted in the unusually high percentage of undecided voters that eventually carried Trump to victory. However, we were of course not certain Trump would win. We also believed it was possible that if Hillary won, Trump would consider challenging the results of the election in a state or two, which could drag out the election process and create market turmoil.

Because of these two high probability scenarios that would be negative for the stock markets, we positioned our TD Ameritrade portfolios defensively going into the election. In the end, we were correct about Trump, but the most unlikely scenario occurred in the markets: Safe haven investments like bonds went down in value while riskier stocks were bid up.

In the short term, this is unfortunate and quite frankly annoying. In the longer term, and maybe as soon as a few weeks, we still believe that the message from our last commentary is appropriate. We believe there is a high probability that the Federal Reserve raises interest rates soon. The purpose of raising rates is to slow down the economy and dampen inflation. This should result in a bond market rally as investors shun stocks. It is always best if a position works in your favor from day one, but at this time we do not want to “sell low” when we are optimistic that a rebound is around the corner. Long story short, we feel that bonds are on sale, and we may even consider adding to positions because of their good potential as a longer-term position. It seems like the end of 2015 all over again when stocks lost and bonds won. If any new data emerges that changes our models, we will update the TD Ameritrade portfolios immediately. For now, please contact us if you have any questions about our current positioning or our philosophy moving forward at info@summitfc.net or (586) 226-2100.

If you are a client and disagree with any of the moves inside your portfolio, if you would like to update us on your risk tolerance preferences, or if you have had a dramatic change to your income or financial situation, please contact us to discuss it

Summit Financial Consulting LLC

43409 Schoenherr Road, Sterling Heights, MI 48313
Phone: 586-226-2100 Fax: 586-226-3584 E-mail: info@summitfc.net
Securities offered through Gradient Securities, LLC (Arden Hills, MN (866)991-1539) Member FINRA/SIPC
Summit Financial Consulting LLC is independent and is not an affiliate of Gradient Securities, LLC. Investment advisory
services offered through Summit Financial Consulting LLC, a Registered Investment Advisor in the State of Michigan.

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Contact Us

Phone: 586-226-2100
Fax: 586-226-3584
info@summitfc.net

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We are located at:
43409 Schoenherr Road
Sterling Heights, MI 48313
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Securities services offered through Gradient Securities, LLC (Arden Hills, MN 866-991-1539).   Member FINRA/SIPC.  Investment advisory services are offered through Summit Financial Consulting, LLC, a MI registered investment advisor.  Gradient Securities, LLC and its representatives do not render tax, legal, or accounting advice.  Insurance products and services are offered through Summit Financial Consulting, LLC.  Summit Financial Consulting, LLC is not affiliated with Gradient Securities, LLC.

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