Planstrong Financial Forum 1-7-16
Jan 7, 2017|
"Smart investing, simplified"
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
Now. From the plan strong broadcast studios it's good play and strong environmental forum where your host. Jim farmer and move presumed plans strong investment management. Whole portion there's still I'm Bruce Morton investing you simply look forward. And welcome to the first. Official program of choice infancy of the new year and welcome back to pull Parsons is back from sunny Florida. I am and great to be back. And you knew you Clinton golfer no I did I was actually down there was almost eighty degrees every guy can sue when you say greater back that was life. I it was purely a lot it was called this like I actually that's not true I love being back in love being back in the market and we had a terrific year this last year but not yet it to stick to take a week off Phyllis that was nice thank you for you and Alex looking after the storm I was gonna. Of course and so here we are it's as if you say it's a first program of the new year Torre seventeen so we. We we look a little bit back words at 22016 which Alex and I do do it last you know you get and then we look forward a little bit this week to look at what does Tony some team look like we do need to take a picture don't we around this time of year would absolutely be in January a snapshot of a well how did you do our own okay you're gonna start to be able to asserting their statements he rents they've already got my OK they don't sell and take a look at written I did you do want benchmark sure measured against you I think I did okay but did he. Yeah I mean an innocent it's funny you bring that up Kenny because a so much of what people date they get their results. And unfortunately this the a lot of this frankly is to do regulations right the regulations. Make it such that it's really hard to print the appropriate benchmark against which to measure your performance from actual performance so say you made 10% this last year is that good or bad. And and the short answer is well some people look at and say just on its cover 10% scrape up all take 10% in view of the week but. Compared to what what should you have made and how much risk did you take ten to make that 10%. An example I always like to give it is. You know 10% if I could make 10% on US treasury. Sign me up right because overall risk associate without seems quite low but on the other hand if somebody said listen all paid 10% to play Russian roulette and five of the six chambers of the gun. Have bullets and not that's not my idea of all the really good 10% that are right and so that's the perfect example of how much risk did you take to make that return also have to look at what is the what is the potential universal for terms and just to give you an idea. In 2016. Yes and 500 which is an index of 500 largest up publicly traded stocks in the United States. Made about 12%. So sure 100% invested in a US stock portfolio. It makes sense to compare your returns to that 12% did you do better or worse than that most people. Art a 100%. In US stocks and the reason for that is 'cause it's not prudent for them to be a 100% stocks. Does 2008 and now if you're a 100% in US stocks in 2008. You would have lost. Fifty or 60% of the value your portfolio of very sure predict time so there's a reason why most people are not an a 100% stock US stock portfolio and so. 12% was what the S&P 500 may international stocks didn't have as good a year they were up about four and a half percent. So you'll typically people will have a mix of US and international stocks in a diversified stock portfolio and typically for US investors. Because we are US centric we do understand our business is better here and frankly. Another reason we are US centric and are investing has to do with the fact that you know people are more comfortable with those businesses they know those businesses they can test those businesses that can walk into those stores or use those products are very very easily as opposed to. You know wondering how well Tencent works in China when you're not a Chinese citizen right so I'm what we'd like to do is just wheat. The US act truth hurts. And we the international stocks at 130 if you adapt and you should have made about 10% sure a 100% diversified portfolio stocks around the world. So it does get complicated here and admit it makes a difference as our as you said you know much risk my linked to take we're MRI in my investment portfolio to have it right just starting out my wrapping it up so all of that kind of stuff so that's of the reason why do it. This time of year folks need to take a look at that and in if they're not sure I can I can imagine how anybody could be sure how they should have done based on what you just explain the Geneva time for them to give you call. Well and let me just supplement that was one more comment that is. I didn't talk about bonds yeah right right right because I just talked about stocks and they're two different if you will major categories of stocks US sources international but then how about bonds how did bonds do this last year. They may two and a half percent and again most people it is prudent for most people would be a 100% in the stock portfolio. So you have to if you will pro rate or proportion. You were expected return to include some stock return and some bonds return and so the question is well what amount. Of stocks vs bonds should you've had in your portfolio for your risk tolerance and then multiplying that by these actual returns to measuring against structural performance that's the proper way to measure your performance. So it is sort of give your call sit down with you and your team in your office in the next week or two or three and and go over okay what did I do what should I have done these kind of the usual for that do you person for their portfolio and take a look at the major do OK did you not how can you improve this. Absolutely it you know how I do it is really on a more complicated. Question aren't there and it sounds on its face. But once you understand how immature you could provide a very simple answer and corrective to an accurate answer rather than just. Oh you made 10% are great what is it what it does is allows you to internalize it to die Jack's. What does that 10% me did you actually do well or did you not do well. Did you make 10% taking a risk of the treasury or Jimmy 10%. Taking the risk of playing Russian roulette. And then part two of that is how should have done so if I get let's say I did make ten. And do risque side but how should I have done given your risk I was taking collect and that's the kind of thing you can explain in your meeting with forcibly remind our listeners your toll free number Paula it's 8889727526. ADB 972. Planned or more land to plant strong dot com and just send an email to to Obama's team though to read back you separate meeting. 8889727526. And January is time to sit down surest answer all right ought to do or should conduct. Let's look at our stories of the week we've got a lot to cover this week both stories are good to take a look at the outlook for 2017 is well and what different segments of the of the investment world we're going to be looking at we discovered a couple of hours last Rahal up so we'll talk about that also on the show later on the let's start off with some of the stories we did have some stories some data some. Most outlets I mean this is a big week because you know there certainly was some key government data that came out starting with the jobs report shall talk about it once act tough start of the markets did this past week first I was like to give people flavor for the actors and you all you do when you're driving home here how did the market do that day you know and you know I don't know about you but I'd like to. And once a week I like to reaffirm. Kind of reset. We are I know all the markets are and there's some key metrics that I look at the markets but I suggest. Anybody has any significant amount of money in the market should not starting with you know first of all how was the week from a stock perspective was it a good week or Gatwick and and a short answer was an OK week. I it was a it was C a tree it was shortened week aren't trading perspective as you know Monday was at an off day for the markets but Tuesday through Friday we traded. And you know you're US and international stocks were up you know are around 1% this past week. And European stocks also were up about 1%. In dollar Turks now. Many of these indexes are at or near all time highs and I get a lot of questions about that. As to whether or not there's more room to Ron Paul talk about that when we get into the forecast. Ellis talk about bonds that's stocks truck about 1% for the first week. What happened to bonds don't not much on the yield on the ten year is it about 2.4. Percent so. You know it's down just touch from word ended the year outlast your arm and yields on the ten year German bonds are down a little bit down about point 2%. And the German this are the Japanese ten year is. Continues to be at just about zero which by the way is their target now. US short term rates look like they will increase again in June. Are based on the cart Fed Funds futures prices so that's something I look at every week to seat does look more or less likely this week vs last week as to whether or not the Fed will raise short term rates and what this means is don't forget were expecting three. Interest rate increases from the fat. In 2017. And eat each of them being about 25 basis points or point 25% each okay. And what we're saying is so far the futures have priced in the likelihood of the first one of those occurring in GO. Okay and what I do us dollars. Continues to be strong current down I mean it's true it's really strong the the US dollar vs the year old. Dollar five can't it's time to go to your guy does slow that is at just a tour terrifically strong number I will talk about this more also in my new stories later there was any idea prognostication. By several very reputable our currency speculators who are looking for big dollar not only to go to parody but actual with the Euro but for the Euro actually dropped to ninety cents per Euro which is just really stock. They understand your dad can really attack and out and bring your suitcase truly married and decent gas is suitcase is time to go shopping right it would oil present and following that pretty closely it was can we years you are willing to oil prices and why are oil prices so important to so important because. Are starting the earnings of the oil companies if if oil prices are recent lift or moderate that it doesn't hurt consumption that China but what it. Also helps us the earnings of oil companies and we've been depending. On the price of oil to rebound to a degree to really fuel sorry for the pot and write to fuel. Arm and improved overall corporate earnings are for the United States and and for our stocks as well we X we saw the price of our oil this week go up to about 54 dollars a barrel for west Texas and almost 56 or 57 bucks a barrel. For Brant brown so you now mind you don't forget we that we set out last year the beginning of last year when Orioles at 26 bucks a barrel we said we expect to end 2016. In the high forties. And there we would add ten dollars a barrel each year. The next three years afterwards to finish shop around eighty dollars a barrel. In 20182019. Yeah I think we are right on on track that at this point we're in the mid fifties at this point. And and as you mentioned it's a price that it didn't jump to fought too much so that consumers are getting burned but it is fueling some income for for the energy companies we can better ball we're going to look at. The December employment report there's number big number to talk about as well some other news stories and the young for 2017 it's a play a strong financial form. This is Paul Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what they need to take a look at your investments and retirement plan called my office of 8897275260. That's 888972. Plant. Securities and investment advisory services opportunity for them to prevent the birth and as I can see Clinton investment management is an affiliate commissioner everything's included in the Washington diplomats who. Through six I this is Avi Nelson. People use different strategies to acquire enough money for retirement some try to do it themselves others buy insurance for investment products though sometimes those benefit the seller more than the buyer. What makes sense is to hire an advisor with first rate credentials and why do investment management experience he should have a fiduciary obligation to act in your best interest and we paid the same amount the matter watcher invested in if these things matter to you. Call Paul Parsons had planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment. That's 888972. Plan or vision plans strong dot com. Securities and investment advisory services offered through next financial group linked member former SIPC plans to investment management is not an affiliate of next mention grouping and is located at ninety to Washington street Dedham mass. We're. Okay. Okay. It's. It's. But I'm strong broadcast studios at the epicenter of journalism this is no plans strong on national forum where all Parsons president of planned stronger investment management. And pumpkin carver at the anchor desk along with all Parsons and it's west confidential inform and not just reminder if you're starting to get viewers you're in good. Statements in time to look at them very closely and decide well it's time to call ball quite frankly because you wanna know how you did and how should you have done. And now this is the premise of the pollen is team worked perfectly willing and able very well to help you with the Saddam would you go over because as we discussed muscling Paul is not just tell you did. But how should who have done we just funny are you do this tough enough these days where the benchmarks can what benchmark he used it's really is at least give you back thirty benchmarks so help me. It doesn't help Miller does is it covers them legally yeah and it frankly covers them from the regulators I mean I know listen. I know regulators should dare to help people and to make sure that people don't give misinformation. But the problem is. At some point it be eat it becomes so sanitized. That the you get nothing from you get is a whole bunch of data and you have no idea what to do what if you're just a regular person who's trying to understand their financial statement may not be misinformation but this certainly isn't useful when I was dating somebody who doesn't orders -- really can't look at that those numbers and know exactly what you should be looking the first question you should ask is how good I do and second question you should ask is how should I have dot OK and you compare the two that's the correct way to look at eight. A financial statement. And as I sat on even my own financial statements are provided by our broker dealer. Aunt you know they they must have six rate benchmarks on the air none of which by itself is he correct benchmark Kerry had you don't need to take a lead and held a subset of some of those and axis. Hopes of postal. Number in the wake starts observed for usually you don't have to restore over a number 8889727526888972. Plan. Or ignore lender plans strong dot com and send them an email. While we read back to Paul and Alex and in the team and he submitted and another thing we should mention that when you when I sit we view it you don't make plays it with her is that. And I am in my meet endorsers and the other missile team. But Depp pulls it every one of those meetings Oscar important about parts of retarded OS and also about it what's been happening in the markets both. You arcs and how cups of coffee you have to go fired up you. What I mean sometimes you're sleeping sometimes I do but what I think you hit the gym this afternoon don't just work off one dollars on an awful lot of crashing Molinaro happen this is you know we need to -- grown out well over the hill before -- -- the business stores I have to mention a personal note that I am pumped because my son our youngest child is getting engaged so we can graduate and amazing that he's so it's actually happening tonight why so we're very excited and John and our travel in new York and all the big event it's gonna happen -- hopefully she says yes she's got a little either that are cannot I don't know what we're gonna do with our son -- -- -- a -- -- sort of -- its doors at the -- either -- they were going to be -- a cocktail that's tonight. But anyway big night for Tyler self congratulations to Mike your son that's very very nice thing about both of these children married to a whole different thing wow off the payroll and married I did and it gets any better than that well I think you know the grand kids will get better ball that's there and that they're back on the Terrell. Old school sort of 00 I gather did you guys ask you to succeed Richard or whatnot that you jab at me down but to do you guys aren't OK you two daughters are not married yet okay so it as we get on the path yeah my daughters married I I just have a son brown now that I can tell camp are OK you win that barrier we got barely got. Well and as we try to prepare for those events yeah all we need to look at our guys made more money here's Rene money so let's look at some of this at a news stories coming out of Washington over the last day or so we have the big employment number. That was by far the biggest stock data story of the weekend. It was an okay employment report for December. You know essentially the US economy added about a 156000. Nonfarm payroll jobs in December. It was down from an upwardly revised November number you know you and I laughed as it always downward revised after the fact that they didn't this time was upwardly revised number for November of 204000. So November was actually pretty good Mott. On December less self and by the way the December numbers of a 156000. New jobs. Slightly below the median forecast in about 175000. So OK you know even now you know why people didn't hold their Knoll this Monday. They weren't exactly DD in the streets either witness one overall the economy added about 2.2. Million jobs in 2016 and again. Great but what does it mean. While the economy added two point 7000000 and 2015. That's actually had decrease of about 20% fifteen or 20%. Between 2016 vs 2015 and I think that's another reason. White people and investors out there were wondering was this thing starting to run out of steam. And the good news Seles I think a lot of people were anticipating a tax cut from the trump administration. That could if you will Turbo charged. If you will feast to of this economic expansion so certainly I would say that this thing was starting to slow down and job ads are good indicator that based on other jobs or I didn't 2016 vs 2015 is just reported the unemployment rate actually is is high it's at our part it's slow it's at four point 7%. Which is very very close to the Fed's mandate from full employment. On but it went up just a little bit because actually for good reason more people tried to reenter the workforce so that's a good scored labor participation rate or that one up a little bit but probably the most important piece of data from this has to do what the Fed is gonna look at the Fed is gonna look at two things on this reports first how many jobs it yet a 156000. You ought. OK but the second thing they're gonna look at is wage inflation are we starting to see wage inflation why because. We each inflation is the ultimate engine for what drives general inflation why because. If you're there are and you get more money in your paycheck. Then you're gonna spend more money you can drive prices are okay and the corollary is true. If you're not getting wage increase is where you're getting salary reductions. You're not gonna spend as much and crisis are gonna go down. So wage increases we each inflation's very important to the fact it came in and act. Act two point 9% year over here are some of the worst crisis or wages were up two point 9%. Higher. At the end of 2016. Vs the end of 2015. Jack is important because what it means is the Fed is starting to get it or have a basis for further increasing interest rates to keep inflation in check wage inflation number had been stagnant for a long time real we are the ones on the cell I don't know maybe 2% if this is the highest were increase since the beginning of the war of the recession OK okay so it's a nice piece of data and it needs to have several more months in that ballpark for the Fed really to take note of it. But I gotta tell me of all the data that came out in this jobs report to meet that was the most important. No manufacturing data we got some of the island where both manufacturing and services us we'd both little Merck spent okay how's that our poppy I and that's and start you know not typical of what we've been reporting during that one up one down dwelling or we saw services are threatened during the year we saw manufacturing down earlier in Europe starting in September of this past year started to turn and in fact it has turned. And and I both manufacturing and services are now expanding at this point that's good news. And motor vehicle sales came out this week to another important data point. On and day on an annualized basis were up in almost eighteen million range but all little over eighteen million range but. Offer the year. We sold seventeen point six million cars in 2016. And what that is is that's the most cars and light trucks sold the United States have. Okay over how come there's so that's a good hurt that's a good number not to but again volumes were tame in the latest quarter. By providing the biggest incentives what's an incentive 10% discount average discount on us art car light truck was 10%. On and and you know obviously that's gonna get units off the lot the thing that's good about it. 201660%. Of the car light truck sales were actually car or light trucks and suvs. Vs 56%. To 2015 what does that mean. More profit for the car companies because Carson light trucks are light trucks and suvs. Are more profitable the higher ticket items compared to if you will a stripped down chassis Mary Gardner I think of it that way so the profitability. Of are the car company should be better and what's fueling that sorry double pun again. Low gas prices actually read we see that that changes so quickly when gas prices go up the people who write up from small cars in the new customers you know what's gonna get interest in two I think I think trump will eliminate or or chased down a whole bunch of these mandates and a bunch of states. Have mandates already as to how many electric vehicles have to be sold their state also the stuff and you know I I have to tell you are at some point that the rule the A Russa is gonna come home mirror and border and have a problem because people aren't buying what the government's talent may have to buy it right. Right and we also heard from the from the Fed the release their minutes from last month they did and what you know. Kind of beyond report what the but the big thing they said was there's uncertainty out there because we have a new president coming and we didn't anticipate coming in and least talked about a number of different things that he wants to do including a tax cut and some other things. But we really don't know how they're gonna play out yet cause he's not president archive so. They didn't say it that way they set it in a lot more flour relentless rhetoric that that sounded really great but the reality he has. It bass said there's uncertainty of how federal spending tax and regulatory policies are gonna unfold under the trop administration so. More to calm but they are comfortable I believe in raising rates probably three times in 2070. Another good initiatives initial jobless claims number gas so it just a compliment that jobs report of a 156000. Ads. Check this out 235000. Individuals went on to an initial unemployment that is the lowest number I can remember we've reported sense since the bottom of the market right pretty much as we started this program bachelor and the number of low Nelson and and just for our listeners to understand typically. Anything under 275. Or even 300. I remember to 300 being being the kind of pressure I write it what you got under 300. You're essentially a full employment or closer to full play and more portly. You're not seeing lay offs of any kind in in insignificant. Our fashion crash and 235. Is. It's incredibly low number we'll see if it's if it's just a date anomaly or that's reality one where you though I think most people would say the state of the labor market is relatively healthy at this point all we come back we've got some Tesla stories some other business news stories to talk about and then of course. The outlook for 2017 disciplines from financial form. This is Paul Parsons president of planned strong investment management. And you're listening to the plan's strong financial performance WRKO. Boston's talk stations if you like what you hear on our show and what I need to take a look at your investments and retirement plan called my office of 889727526. That's 888972. Planes. Securities and investment advisory services offered through metro metro group put her finger as I can see Clinton investment management is an affiliate of this nation grouping concluded the Washington can domestic. 26. Hi this is on he Nelson if you're fifty or older here's a suggestion commit to getting your financial house in order. Over the years you worked hard took chances made sacrifices. And built up as much wolf as possible so you'd never run out of money and retirement. Well now it's time to get organized and to make sure you have a financial plan that will protect your retirement. If your financial life together. Call Paul Parsons at play and strong investment management to schedule financial check up. Call 8889727526. That's 888972. Plan. Commit to getting your financial house in order call 888972. Plan or vision planned strong dot com. And his look at what I need in Washington street donors. Who says financial talk then veered signing and informative. At least it's informative it's deep and strong financial forum where gold portions president's bold plans stronger investment management. Yeah. Yeah I'm Dan Garber at the end the desert along with the ball Parsons is the plan struck finance reform and this is our first official program Tony seventeen. Last week get out tonight Kendall the New Year's Eve program which is kind of fun. And we covered a lot of what was going on and Tony. Sixteen and it looked a little bit what should be doing on the 27 and some of the outlook sperm would. What folks are expecting 12017 so that was increasing. And by the way if people don't listen to that show now you can go to W war PO dot com or go to loves star show host radio shows they have more on all our podcasts or there you can listen to me anytime you want I can imagine why anybody wouldn't want to just listened perhaps that it just listen to all 52 of last year's programs right about now allow this kind of gets -- just like 52 hours of listening to pray god hear you may were torn royalty yeah no this is the one we might start off like that lesson the last weeks at least yeah absolutely and then of course when you wouldn't order a little bit more about the Olympics when he seventeen coming up but we also have some stories to over and would it wouldn't you wouldn't be a week of play straight we never Tesla story well it's you know what let's do that shore Galloway got so you know and by the way I do wanna make a plug for that swim. Those of you that just got a statements are you should call our our special. If you're not sure wore the look EE can understand how you dead usually there will be an weighted average return for you what you actually need. In your account sometimes there isn't one for how you did across all of your county for example you may have before one K plan. May have an IRA you may have a brokerage account all kinds of other things right. And somewhere somehow you need to consolidate those and say overall how did my portfolio to that's one thing but then the second thing you need to understand this well so should I have to. And I strongly suggest you call our office ask for an appointment with a us and we will sit down no obligation no pressure nothing more fee based advice that what that means is. We charge people up percent of assets to manage their money will sit down for would you go for nothing and just take you through. How you did and how you should have done at that level of risk and there'll also talked about whether or not the amount of risk that you talk was actually appropriate for your circumstances. Protect. Also for number 8889727526888972. Plan. Or you can go online to plan strong dot com Justin and email them to read back you. Senate appointment the next week or two. We go over that argue do how bush you should've done. And you know the whole idea of benchmarks it is it's it's to it's only good idea but it's complicated it's a lot more complicated that I think. As some post let on and I just know that but with some of by statements like I get home early benchmarks under and always struggle to that is. And you know as I said and prior segments of the show I don't begrudge that broker dealer sure doing that they have to do that because the regulators make them do that. But by doing that only do is provide you with a pile of data. Against which are exposed to compare your results you have no idea even where to start none none whatsoever and by the way the answer isn't on that page she introduce a man down based on what your portfolio is comprised of to use a combination or a subset of some of those indicators that that they're providing you resourceful well but you are that's of center for somebody you know the majority of argued call Paul and his team unity 9727526. Are also let's get onto that Tesla story because this interest and stuff while nor copilot Tesla stories this week are starting with. Tesla started manufacturing. Batteries at their gig a factory in Reno Nevada. Our if you seen a picture of the scene it hit out perhaps a little bleak here. Rush om and it would it but it's important it marks the start of mass production of battery cells in the US acting in a market that's been long dominated. By China and Japan and South Korea right now this factory is only about a third complete today but it's gonna double. The world's production of lithium ion batteries by 2018 that's. A year and a half from out OK okay and by the way what are white care. If this doesn't work. Classless model three is dead in the water America okay those roll the roll out of BOB. Wide scale large scale. 35000. Dollar. Car ran in the United States will not happen without this data factory working well and by the way just to put this in perspective. Tasks has a how goal of selling and put more portly producer or get a prism first half. Half a million. Model threes. By 82018. And not if you notice the word 27 AT and okay and most are no I mean us next year out. They have to make half a million that race OK so just think about to start with one. Yeah and there and by the way not only do they have to make a whole comedies but cost. Is a limiting factor because what the purpose of the data factory is. Is to make large scale amounts of these batteries to drive the price down of the batteries without that. The model three at 35000 dollars is on me even more unprofitable Bennett would be other what you said it before but I also really is a battery company aren't exactly what instrument. And just to give you an idea battery prices are gonna have to drop in. Half mile from the current levels and each two nodes get to this point to it for them to make money on a 35000. Dollar Tesla model three so if you owned Tesla stock. The only reason I mention these reports is because you know it it does have such a lore of warning to invest win doc. You don't Elon Moscow Mark Zuckerberg Jeff these Aussie skies mean they are really Smart man bomb but. The question is have even day overstepped what they could potentially deliver a period of time and unfortunately. Hassles kinda known. For over promising and under committing and so you know be where that's all I'm getting out and we look at me you know test slows. Market valuation and their share price. You know it's really quite stunning what the car company is valued at given the fact of what I'm gonna talk about in the next door which is. Task was Q4 sales rose to 22006. Cars from K. 22000. OK I'm just wanna put that in perspective or Gary in a quarter and a okay just put in perspective Ford and GM sell somewhere between 250. And 300000. Vehicles a month or K okay ten to twelve times as many in a month. As they did in a quarter ran OK and last year at the company produced 84000. Vehicles this year they produce only 80000. OK but the reason for that was truthful. Don't forget they had up production champ art challenges with the new auto pilot hardware and that the implemented and the second was. Implemented a whole new vehicle called the model X which is their suvs which is eight beautiful SUV eight but it's not is it beautiful it's. And you make money at this. Given the ball volumes of these things it you're producing. So all I can tell he was Jimmy and isn't the problem. Orders are pretty strong. I'm delivering continues to be the challenge for this company and they need to manufacture. Six times as many cars in another year. And twelve times as many cars in three years to make their business plan work. Now with the stock currently trading at almost the exact same level as it was at the beginning. Of 2016. I think investors are starting to sense that OK we need to make sure these guys to meet their commitments but the reason I bring the story out this. There is risk associate with and it's fun to talk to a cocktail party. Tell everybody won't tell us what you're but there is risk associated with the disinvestment. Now we had some corporate profit numbers tomorrow as well this is incredibly important you know what's so funny he'd start our corporate profits he watched people's eyes glaze over and like no no. Corporate profits aren't things but either determine to a great degree do the one of the biggest determinant of what happens with stock price. Okay and it makes sense and people would your prize earnings or earnings equals. Profits exactly so if if corporate profits are going up that's a good thing there corporate profits are going down. That's a bad thing her right for your good potentially for your stocks right so. Earnings are currently projected to grow 3.2. Percent. Are from the same quarter a year ago according to FactSet for the dispute co Q4 of 26 and we're just starting earnings season right now for. The last quarter of 26 in other words they were recent report the results right. 3% is kind of the they'll look the they're looking for. I actually think that number's gonna be closer to five to 6% really be and again think about it Kenny we knew we were right on this in twenty in Q3 12016 as well. Where originally they thought they had reported at the beginning. Of the earnings are seasoned Stacey gal or are probably lose Warner yum 1%. Were our our earnings are gonna declined by 1% vs the same period a year ago when I say I don't think so I think it's gonna be up 32 or three. It was it was up 3% and typically what companies like to do is set the standard locks at the forecast slow and then beat forecasts because if what Wall Street knows how to do one thing. It's punish somebody that over promises and under deliver an okay. And I think the same things gonna happen here I'm thinking that while it it is expected to be about 3% for this quarter on think of for Q4. I'm thinking that it's gonna be closer to five to 6% partly because that's what the forecast is at the beginning of this earnings season. And by the way. Not only our corporate profits incredibly important that the what are called determine its. Of what drives stock prices but. Take a look at where we expect corporate earnings growth to be. In 2017 because this is part of the reason that I am feeling more robust about investing in stocks and 2070. Currents are forecasted to grow by 11%. 11%. 9%. And 14%. In the fourth quarters of 2011. According to FactSet okay. Those are big numbers are those are good numbers. And frankly I think a lot of today's stock prices. Are predicated on us hitting the house if we don't hit those earnings numbers. Then I can see some sort of correction occurring in the stock market I think that's why multiples are actually a bit high right now and don't resort more to the mean. When we see those kinds of earnings growth actually materialize. There have been long waited for. In 2070 -- all we talked earlier about the Euro and the yen but there is a big story about the peso. I guess because of Donald Trump courtesy of our president elect is absolutely true that currency traded adding new record low this past week against the US dollar as forward cancel plans for an auto assembly plant in Mexico be proud rightly saw your race story out so the current she's lost half its value since the beginning of the financial crisis against the dollar and 12%. Since trump won the election so what does this mean for investors. It means that if you're investing in. Mexican companies more companies that do a lot of business we have Mexico you should beware. It's gonna get interest thing. Mexico's economy could really take a hit with the trump presidency but we have one more business story when we get to when we come back and then also that 2017 outlook support is strong financial form. This is tall Parsons president of planned strong investment management and you're listening to them plans strong financial performance WRKO plus news talk station. If you like what you hear on our show and what media take a look at. Poor investments and retirement plan called my office of EDD 89727526. That's 888972. Plant. Securities and investment advisory services opportunity for an intra group member to her as an increasing funds for investment management and building missions for victims included the Washington street dimension Kucinich. Hi I'm Paul Parsons president and founder of planned strong investment management and a host of the planned strong financial fourth. Perk here every Saturday from three to 4 PM. For a fee based investment advisors specializing in investment management and retirement planning for individuals families and small businesses while throwing one. If you'll retire or approaching retirement and are looking for investment professionals and actively manage your investment portfolio including your company for a one air force really be called 889727526. For no obligation to one on one meetings would meet. That's 8889727526. 808897. To plan. Let us go to work for you. Securities and investment advisory services opportunity furniture groupings of repentance and BC plans to invest management does not including business management group think including many Washington street is immense improvements. I this is Avi Nelson. People use different strategies to acquire enough money for retirement some try to do it themselves others buy insurance or investment products though sometimes will benefit the seller more than the buyer. What makes sense is to hire an advisor with four straight credentials and why do investment management experience should have a fiduciary obligation to act in your best interest and we paid the same amount no matter what your invested in it these things matter to you. Call Paul Parsons had planned strong investment management to learn more call 8889727526. Hiring the right advisor could be your best investment that's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group and member former SIPC plans to investment management is not a food and residential real big and is located at nine Washington street didn't matter. Yeah ground zero for your financial news and economic commentary. This is the plan's strong financial forum where all portions of the president's homeland stronger investment management. It's okay that I can ever had been introduced along with Bob Parsons the plan's strong financial form and as we started off the program and we've we've talked about it quite a bit. It's January 1 program of Tony seventeen and this is the time you're going to start getting out is you match you've already got some of your statements. And now most people will be getting them just about Nazi hunter just got it here but to get it you can look at that statement and he. You've got to wonder what the heck it says quite frankly you're gonna say how did I do how should I dot right. And those of the questions you really need to ask in north to ask you correctly have him answer correctly correctly more important Lafley court it's obvious what trust which saw. Congressionally well I thought. Well you should call quality RC does not only can we don't worry a little fire. No but I'll be more than happy to tell you how you did and how you should have done. Polls don't remember eighty 89727526888972. Plan. Or go online to play strong dot com and cinnamon emails a policy W a new team and even the know how I did and now I should have done and the reason. Each is the numbers you see those benchmarks it's really hard to make any sense out of. It sure as you know when they provide you those index returns at the bottom of your sea Brent that you eat a lot of people look at them go to its owner what those are four and then the short answer is well. That's the closest that a lot of these investment companies can company's broker dealers can come to to being able to provide you how he should've done. But here's the problem. And most of the time. One of those is not. The appropriate thing to make sure I get that performance of your portfolio against it's usually. A subset of those maybe tour three of those things we needed a certain way depending on how much riske took in your portfolio. You do the math. Now an ultimately can figure out what you should have made kind vs what you actually didn't make. So is it with ball. And his team 8889727526. To scan the McCall to no obligation meeting. We have been sued would you spend some time with you know cost no obligation 888972. Planned or going to plans strong dot com send an email. And by the way can eat the no times we sat with people who come and showed us their statements and said okay how did I do you how should I have done. The number of times we say well by the way here's how you did here's how you should have done at that level of rest and the next thing we talk about as well how much. You're tell us about what the purposes of this portfolio what are you trying to accomplish with a sports only option and ultimately what is an appropriate level of risk for you to speak with this portfolio now. Often what will find. Is the amount of risk that's being taken by an individual. Is eaten light eaters from where we should be room again because they're flying blind from our and so I would strongly suggest you do it this is up perfect time for us to take a look at the performance. And by the way just to give you an idea. US stocks. This past year may 12% to you're you're DS and 500 which is an index of 500 largest arms publicly traded stocks in the states may 12%. Okay international stocks anything other than US stocks made about 4%. So you should have shot probably most people would say you should have and and diversified stock portfolio some US stocks and some international stocks. So I mean you should meet somewhere between four and 12% and the stock portion of your portfolio well what portion there you know and part of Danny answer is we can help you with that figure that out and the next thing as well part of my portfolios and bonds would bonds make this last year well high quality bonds make to one half percent. In 2016 and how did your bond portfolio to how should it have got did you take more risk then one of the particular bond benchmarks does that benchmark is only high quality box and so forth you'd really need to understand what's underneath. Each of these indexes and then we them properly she got an overall cancer in the end. What we give people as. Hey you made 9% portfolio this past year you should have made 11% will give you that answer we won't tell you all you gotta do walls multiple care. One DB the idiots. Don't get that answer call all sit with Paul and his team EDD 89727526. Are also we had another story you wanted to get to this little bit more company and it's really interesting isn't about the fact that the low foreign interest rates are having some affect her driver to the lower long term rates here in the USX. Like that well it and it makes a lot of sense when you think about we've been talking about this Kenny for the last several months. That whizzed time. You would expect Lawton intermediate and longer term interest rates to go up especially if short term interest rates are going up but you aren't sure right we've had the Fed raised rates once I'm back in nine era in 2015 to do it again and 2016 we expect three of the house. In 2017. But at the same time. The people that looking at longer term interest rates and saying do I expect those to go up at the same time and what's happened is. There's been a divergence. Of monetary policy what do I mean by that. Well the United States Central Bank the Fed has decided to start to tighten right we actually stopped our bond buying program we started to increase short term rates. And by not doing as much intermediate long term bond buying you expect our intermediate long term. Bond prices to go down and those interest rates to go up and they haven't gone up as much as you might think why. Because it exactly the same time. Other central banks think Europe and Japan Vera loosening. At the same time they're gal got there easing monetary policy and what they're doing is they're trying to get dare interest rates to be as low as possible so off on an investor in Europe. What I am doing is saying well geez I can buy a ten year German bond the pace. Point 2% a year for the next ten years or can buy US treasury pays 2.4 percent I'll take US treasury so that. Pattern has led international buyers to buying our bonds keeping our intermediate and longer term rates. Lower than they probably would have been otherwise it's me but the purpose of this story is set. Recently. We're starting to she bond yields going up. In Europe. And in Japan and the reason for that is because and it's funny you know you look at how loud newspaper sell stories from the Financial Times which is that salmon colored our newspaper you see that there are real intellectuals read its assertion the Wall Street Journal for our international. Armed they had a story talking about soaring. Inflation. In Europe and I looked message she's a soaring inflation as one point 1%. Sore down OK I guess it's soaring compared to zero but you know based said because inflation is starting to quote unquote so war. Then there's a possibility and even a probability. That the European Central Bank may not continue S much would monetary easing what that means is needy interest rates. Offer US spots and intermediate and long term rates. Could go up a bit more so you know you may have dodged a bullet in 26. Team are with those bonds but 2017 may not be as good to you. If you almost bonds because if the interest rates go opt out means the price of existing bonds goes down OK so. But where there were and recognize that really the safety Dow that's kind of kept the lid on intermediate long term rates in the United States may be starting to move in the other tour. So here we are all our first program of 2017. And you know this year is starting off kind of differently than 2016 did. Ed how do we look at 2017 what is the outlook did you have an and other investors effort for the coming year. Well you know it's funny I are the first analysts say when we talk about the so we only have three or four minutes left to the show this week but I wanna make sure I make a couple points. This isn't a political commentary from OK and and you know how you can tell let the best is because Bloomberg. Is not a big trump fan you don't ever and yet Bloomberg amongst others are all saying that and there's no place to hide the fact that there is significant. More optimism. In the markets now than there was before the trump presidency of the became reality okay. And I think. When you look at it like to Barron's recent survey of of the air quote unquote experts and you know those are leading me investment banks and money management firm Jerry economist. Our overall. They are seeing much more positive more optimistic. Our expectations. Of these folks as a result. Of what is gonna happen with the trump presidency and specifically. Its improve profits from lower corporate taxes. It's infrastructure spending. And it's reduced regulation her I have to tell idea of all of those by far and away. The most important one of those three is reduced taxes three minutes reduced corporate taxes and it's reduced individual income taxes and if you don't think that those things matter. All I can say he was looked to see what happened to GDP growth in 196364. When Jack Kennedy and after his demise Lyndon Johnson implemented a big tax cut. And then again in 82 and 86 when Ronald Reagan did it. GDP growth in the following in the years following those tax cuts. Was 45%. A year for a couple years 23 years each after those it gives you an idea of how much of an aphrodisiac. On our our tax cuts are compared to almost any other kind of stimulation foreign economy. I think that's what's really driving this renewed optimism of economists looking at the outlook for 2017. And 2018. Well obviously when we go into this in more detail in the next couple weeks actually but how about give me a little bit of overview of what we should expect well let's talk about the S&P 500 which is I keep mentioning an index of 500 largest publicly traded stocks in the west. But the forecast. By Barron's experts is 2380. By a year round of 2075%. Increase. From recent levels now it's not as robust as past year's forecast. But don't forget some of the growth for 2017 minority in front loaded into. What occurred this past year we got eleven or 12% appreciation in price in that index in 2016. Partially. At the end of the year after the trump presidency occur so overall. Continue to market improvement is the expectation. Of the Barron's roundtable. Once again postal. Number to find out how you did and how you should have done when you look at your urine statement indeed 89727526. Or plan strong dot com well we'll see you next week have a great weekend everybody its plans confidential for. This is Paul Parsons president of planned strong investment management and you're listening to them planned strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what we need to take a look at your investments and retirement plan called my office of 889727526. That's 888972. Plan. Securities and investment advisory services opportunity for an integral member finger as I can see classroom mismanagement and filling in this financial group we concluded the Washington street domestic. Six and strung investment management is located 980 Washington street Dedham mass 0226 and can be reached at eighty to 89727526. Political views may not reflect the views or opinions of next financial group backed securities investment advisory services offered through next financial -- member finger SIPC classroom investment management is not affiliate not a financial group think this radio show is for informational purposes only and is not a solicitation recommendation that any particular investor should purchase or sell any particular security the information contained herein is obtained from sources believed to be reliable but its accuracy and completeness or not guaranteed neater next financial groupings nor represented to pronounce talked about.