www.moneymanagerslive.com Open in urlscan Pro
104.18.136.190 Public Scan

Back to summary

URL:
https://www.moneymanagerslive.com/
Submission: On December 09 via automatic, source certstream-suspicious (December 9th 2022, 4:55:39 am UTC) — Scanned from DE

Form analysis
2 forms found in the DOM

Name: icpsignup — POST https://app.icontact.com/icp/signup.php

<form action="https://app.icontact.com/icp/signup.php" method="post" name="icpsignup" id="icpsignup" onsubmit="return verifyRequired();" accept-charset="UTF-8">
  <input type="hidden" name="redirect" value="http://paragonwealth.net/successfa.html">
  <input type="hidden" name="errorredirect" value="http://paragonwealth.net/error.html">
  <script type="text/javascript">
    if (document.location.protocol === "https:") document.icpsignup.action = "https://app.icontact.com/icp/signup.php";

    function verifyRequired() {
      if (document.icpsignup["fields_
          email "].value == "
          ") {
          document.icpsignup["fields_email"].focus(); alert("The Email field is required.");
          return false;
        }
        if (document.icpsignup["fields_fname"].value == "") {
          document.icpsignup["fields_fname"].focus();
          alert("The First Name field is required.");
          return false;
        }
        return true;
      }
  </script>
  <div id="SignUp">
    <table width="260" class="signupframe" border="0" cellspacing="0" cellpadding="5">
      <tbody>
        <tr>
          <td valign="top" align="right">
            <font size="1" face="Arial,Helvetica, sans-serif">*</font>
            <font size="2">Email</font>
          </td>
          <td align="left"><input type="text" name="fields_email"> </td>
        </tr>
        <tr>
          <td valign="top" align="right">
            <font size="1" face="Arial,Helvetica, sans-serif">*</font>
            <font size="2">First Name</font>
          </td>
          <td align="left"><input type="text" name="fields_fname"> </td>
        </tr>
        <input type="hidden" name="listid" value="12829">
        <input type="hidden" name="specialid:12829" value="2S3Z">
        <input type="hidden" name="clientid" value="551950">
        <input type="hidden" name="formid" value="857">
        <input type="hidden" name="reallistid" value="1">
        <input type="hidden" name="doubleopt" value="0">
        <tr>
          <td></td>
          <td>
            <font size="1">*</font>
            <font size="2"> = Required Field</font>
          </td>
        </tr>
        <tr>
          <td></td>
          <td><input type="submit" name="Submit" value="Download Now"></td>
        </tr>
      </tbody>
    </table>
  </div>
</form>

GET https://www.moneymanagerslive.com/.services/blog/6a00e54fa07ce2883300e54fa07ce38833/search

<form id="search-blog" method="get" action="https://www.moneymanagerslive.com/.services/blog/6a00e54fa07ce2883300e54fa07ce38833/search" class="form-search form-inline" role="search">
  <input type="search" name="filter.q" results="5" value="">
  <input type="submit" value="Search">
</form>

Text Content

MONEY MANAGERS LIVE

MONEY MANAGERS AT PARAGON WEALTH MANAGEMENT POST STOCK MARKET UPDATES AND
ARTICLES WEEKLY.

* Home
* Paragon Wealth Management
* Wealth Management
* Subscribe
* Risk Tolerance Survey
* Portfolio Review
* Archives

THURSDAY, FEBRUARY 26, 2015

NOW SHOWING IN EUROPE: NEGATIVE YIELDS – NEXT STOP: THE U.S.?

Written by Nate White, Chief Investment Officer of Paragon Wealth Management

Yes folks, the condition where you actually have to pay someone to hold your
money or you get back less than you deposited is now a reality in Europe. In
anticipation of the start of the ECB’s asset purchase program yields in many
European countries are now negative. Why would someone accept a negative yield?
One reason is that you might expect deflation to continue to fall pushing the
price up even further or giving you a positive real yield. Another reason could
be regulations that force people or institutions to hold negative yielding
instruments. Unless you’re using your mattress you pretty much have to put your
cash in a bank/depository. Fear of an economic downturn or disaster could make
getting most of your money back rather than losing it a relatively better
prospect.

Due to the Fed’s zero interest rate policy and QE we in the U.S. have almost
been there for years. I bet you are just loving that zero percent you basically
get on your savings! In fact, after adjusting for inflation we’ve had negative
real yield for some time on cash or near cash instruments. However, now the Fed
is in a tough spot trying to raise rates to match the economy because most of
the rest of the developed world is doing the opposite. Our relatively higher
rates are causing the dollar to soar as foreigners buy our bonds. As the dollar
increases it creates stress on emerging markets and U.S. multinationals. This in
turn gives the dovish Fed the excuse to put off the date for rate increases to
begin.

Central banks however can only do so much and their actions to prop up assets
prices don’t necessarily translate into economic growth. Overtime the marginal
benefit from asset purchases decrease and then we are left with paying the price
of trying to unwind them. The pain of trying to unwind then causes the Central
Bankers to refrain altogether or even add more QE. The cycle never ends and we
are trapped.

Let’s hope the world doesn’t end up being stuck in an infinite loop of QE and
negative yields as they seem to be associated with subpar economic growth in the
long run – just ask the Japanese.

DISCLAIMER
PARAGON WEALTH MANAGEMENT IS A PROVIDER OF MANAGED PORTFOLIOS FOR INDIVIDUALS
AND INSTITUTIONS. ALTHOUGH THE INFORMATION INCLUDED IN THIS REPORT HAS BEEN
OBTAINED FROM SOURCES PARAGON BELIEVES TO BE RELIABLE, WE DO NOT GUARANTEE ITS
ACCURACY. ALL OPINIONS AND ESTIMATES INCLUDED IN THIS REPORT CONSTITUTE THE
JUDGMENT AS OF THE DATES INDICATED AND ARE SUBJECT TO CHANGE WITHOUT NOTICE.
THIS REPORT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED AS AN OFFER
OR SOLICITATION WITH RESPECT TO THE PURCHASE OR SALE OF ANY SECURITY. PAST
PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS.

Posted by paragonwealth on Thursday, February 26, 2015 in Current Affairs,
Economy | Permalink | Comments (0)

WEDNESDAY, FEBRUARY 04, 2015

UNCLE, UNCLE!!

Written by Nathan White, Chief Investment Officer of Paragon Wealth Management

The dramatic drop in the price of oil over the last few months is captivating
the markets. It seems it is coming down to a giant game of chicken to see who
will cry first: Shale producers, unstable oil dependent export countries such as
Nigeria, Venezuela, Russia, or other unconventional sources such as deep-water
and oil sands projects. A massive supply glut that has been building for the
last few years has finally come to a head. On Thanksgiving Day, to the dismay of
many OPEC members, the Saudis decided against a production cut and in favor of
letting the price fall in order to maintain their market share. They have
decided to let the market do the work in taking out the competition. The
competition to OPEC from the so called unconventional sources (e.g. shale, deep
water, oil sands) is responsible for most of the global production growth over
the last few years.

There is no way to know where oil prices will bottom. The drop is in a spiral
that has tremendous downward pressure in the short-term and trying to call the
bottom is nearly impossible. Everyone is producing as fast as they can while
they are still alive. This causes inventories to continue to build in the
short-term thereby exacerbating the supply situation and causing the price to
continue to fall further. Drilled wells are literally “sunk costs” and you might
as well keep pumping and getting something for them. However, new wells are
discouraged from coming online at these low oil prices. The economic effects are
just starting to be felt on the oil producers and it will take at least a few
quarters to play out. In the end it is as it has been said, the cure for low
prices is low prices. Ultimately it is more of a question of how long rather
than how low.

The Saudis can withstand the drop with a few caveats. They may act sooner if the
price drop creates systemic effects that threatens themselves in a geopolitical
manner. The dramatic drop in oil is now getting so low that it is causing
tremendous pain for oil dependent countries like Venezuela, Iran, Nigeria and
Russia. The contagion effect from a crisis in these countries is becoming a
significant concern. If the concerns for economic stability become too great you
could see OPEC act as it is in no one’s best interest to have a significant
devastation to the global economy.

Ultimately, oil prices are unsustainable at these levels and lower. How does a
one percent excess of inventory levels lead to a fifty percent drop in the price
of oil? In the end low oil prices are self-correcting as the effect on high-cost
producers reduces supply in the out months and years. The big question long-term
is whether $80 oil will be the new $100. The oil market is currently
oversupplied by 2 million barrels a day. The irony is it really doesn’t take
much disruption to take out that oversupply – which would cause prices to
ricochet back up. Nigeria, Libya and Venezuela, produce about 5 million barrels
a day and all are fragile situations that are hurting significantly. Much of the
U.S. shale production is on the ropes, especially among those who came late or
in low quality areas. Cheap capital and high prices made the shale boom viable
but now the situation is the opposite. Some shale production will always remain
but much of it could fail. The majority of shale wells are depleted within two
years requiring constant drilling to keep up production. The constant drilling
requires continual capital infusions making it questionable even in good times.
On December 11, Bloomberg reported that a Deutsche Bank analyst report predicted
that about a third of junk rated energy companies may be unable to meet their
obligations at $55 a barrel. When prices recover shale will not recover as
quickly now that its weaknesses have been exposed.

As I mentioned in a previous blog post, much of the energy boom in the U.S. has
been financed with cheap credit to due to the easy money policies of the Federal
Reserve. The process of normalization has caused the dollar to rapidly
strengthen because our rates are higher relative to other developed countries.
Since commodities like oil are priced in dollars a rising dollar pushes the
effective oil price down. Rapid currency movements can create economic stress
with major casualties. Normally the Fed could combat this by lowering interest
rates but rates are already at zero.

Although the price of oil is down over fifty percent since last summer the
current panic indicates that a bottom could be found in the first quarter of
2015, if not within the next few weeks. Whether that means it dips into the $20
or $30 range first is a real possibility. However, there is the very real
probability that prices could recover quickly. Shale production growth will come
off faster than expected. As mentioned previously, most of the current
oversupply is due to shale production which can be brought online much quicker
than conventional oil projects and requires constant drilling to maintain
production. Now the lower price and higher financing costs will preclude new
shale production from coming online thereby reducing the future supply growth.
From a technical point of view, the price of oil itself is in a panic sell-off
with extremely negative sentiment. As the supply/demand dynamics eventually
change it could cause the price to snap back as quickly as it went down. As I
mentioned earlier the surplus of oil is only one percent above daily demand.
That is literally on a few hours of worth of consumption! Oil fields are always
in a natural state of decline and so require new means of production to offset
the declines. The demand for oil grows faster at $50 a barrel than $100 and
demand was growing when the price was over $100. The net effect of lower oil
prices is a stimulus to the economy.

So what is our current approach in regards to energy? We are currently altering
our exposure in the energy space to reflect the new reality and opportunities.
Along with everyone else, we have been surprised by the dramatic drop in oil.
The impact on energy companies’ shares has had a negative short term effect on
our performance but is also creating great opportunities as the quality assets
get taken down along with the weak ones. The challenge in the short term is
whether some version of a crisis develops because of the contagion effects of
the economic damage done to energy producers or export dependent countries. We
will use any continued drop to gain exposure to quality assets in the space but
in a patient manner as a bottom has not yet been put in. We want to take
advantage of the sell everything related to energy mindset that is currently
unfolding. We favor conventional and well capitalized energy producers and
servicers and will be moving our exposure in this direction.

Posted by paragonwealth on Wednesday, February 04, 2015 in Current Affairs |
Permalink | Comments (0)

WEDNESDAY, JANUARY 28, 2015

WHY USE AN ACTIVE MANAGER?

Written by Dave Young, President & Founder of Paragon Wealth Management

Because certain indexes have performed well over the past few years, those who
promote passive investing are recommending that you follow the current fad and
just buy index funds. Passive investing can be useful if it is done right.
However, it can be dangerous done blindly. Passive strategies are fully exposed
to the whims of the market and can expose investors to significant declines and
risks. With this approach you must be aware that you will likely go through a
50% decline at some point.

Making money is difficult. Keeping your money is even harder. There seems to be
ten ways to lose money for every one way there is to make it. To complicate
things further, managing investments is counterintuitive. Research repeatedly
shows that most people invest when they shouldn’t and don’t invest when they
should. According to studies by Dalbar, for the 30 year period ending December
2013 the average stock market investor earned only 3.69% compounded versus
11.11% compounded for the broad stock market. Underperformance of 7.42% annually
for 30 years is a huge penalty for the “average” investor to pay.

The bottom line is that if you do not have the time, resources, and expertise to
manage your money then you are walking into a minefield. Over the years I have
seen countless people lose their entire savings to bad investment decisions.
Whether it be through leveraged real estate, misguided business ventures, poorly
structured annuities, bad stock choices, expensive life insurance, loans to
relatives, or even offshore investments, the end result is always the same. They
lose their savings and what was once a good situation turns into a bad one.

Your success has brought you money. That money can be a blessing or a curse. If
you manage it properly then it can help you simplify and enjoy your life by
allowing you to do whatever is most important to you. If you don’t make good
money decisions then it can bring you more grief than good.

Everywhere you turn there are different voices telling you how to invest.
Financial news channels, magazines, insurance companies, infomercials,
self-proclaimed experts, etc. There is no shortage of free advice. The problem
is that most free advice is worth about what it costs.

Paragon has been guiding investors for 28 years. We have experienced, survived
and thrived in some of the most difficult markets in U.S. history. Those very
difficult markets include the Crash of 1987, the Asian Crisis of 1998, the Tech
Collapse of 2000 and the Financial Crisis of 2008. We have steadily grown in the
face of adversity.

Our clients are our friends. We are their guide. Our money is invested right
alongside theirs. Most clients initially choose Paragon because of our stellar
investment performance. However, as time goes on they realize that our highest
value is actually protecting them from their inexperience and stopping them from
making bad investments. It is our mission to help you make the right decisions
and find financial peace.

Posted by paragonwealth on Wednesday, January 28, 2015 in Building Wealth,
Wealth Management | Permalink | Comments (0)

TUESDAY, DECEMBER 23, 2014

MERRY CHRISTMAS!

From all of us at Paragon, we hope you have a very Merry Christmas and a Happy
New Year!

-The Paragon Team

Posted by paragonwealth on Tuesday, December 23, 2014 | Permalink | Comments (0)

FRIDAY, DECEMBER 12, 2014

OH, WHAT A TANGLED WEB WE WEAVE....

Written by Nate White, Chief Investment Officer of Paragon Wealth Management

It looks like we are finally starting to see the consequences of the Fed’s great
monetary easing experiment. Getting in was easy – getting out maybe not so much.
The fear throughout the Fed’s great adventure was what type of unforeseen
consequences could the happen as a result of QE and artificially low interest
rates. Now we are starting to find out.

Along with others, I have said for some time now that QE has distorted the
markets. It has recapitalized the banks, which I believe was the main purpose,
but the exceptionally low rates and asset purchases have supported asset prices
and distorted credit markets as well. The need for yield has caused massive
amounts of money to flow into the corporate bond space. Almost all corporations
have been able to borrow with ease. Many projects that otherwise would not have
been taken on had rates been more normal have received the green light. Due to
lack of robust economic growth much of the borrowed corporate credit has gone
into share repurchases rather than being used to expand business. It’s hard to
blame the companies though for borrowing as much as they can at these low rates.

The process of normalizing monetary policy (i.e. ending QE and raising interest
rates) has caused the dollar to strengthen because our rates are higher relative
to other developed nations. The other developed nations such as Europe and Japan
are just beginning their QE programs which causes their currencies to weaken
relative to the U.S. Since commodities like oil are priced in dollars a rising
dollar pushes the effective oil price down. A stronger dollar can also encourage
capital flight from developing nations and decreases the attractiveness of US
products and services.

The dangers of a credit bubble in high yield space and perhaps other corporate
areas could be coming to light.
(http://www.bloomberg.com/news/2014-12-11/fed-bubble-bursts-in-550-billion-of-energy-debt-credit-markets.html)
The low level of interest rates has created a huge demand for anything with
yield. Junk rated companies have been able to borrow with ease. Higher rates
would have discouraged this. Example: Much of the energy boom in the US has
been financed with this cheap credit. This caused production and supply to
surge causing an oversupply situation with oil. Exacerbating the situation has
been the aforementioned rise in the dollar.

When the prices of anything goes down it is good for those who use or buy it –
until a certain point. As oil drops it lowers consumers fuel costs and is good
for all industries that use it as an input. However, at some point the positives
from the drop in price become a negative. If the drop in energy prices gets so
low that it causes the energy companies to fail on a massive scale it then
affects the economy as a whole. At some point the crash of an industry can
become systemic and affect the economy as a whole – think the dot-com/tech and
real estate bubbles. Whether this happen spill-over effect happens in relation
to what is going on in the energy space remains to be seen.

The same effect can be seen on a geo-political and global economic level. The
dramatic drop in oil is now getting so low and causing tremendous pain for
countries like Venezuela, Iran and Russia. At first we don’t shed a tear because
these aren’t our Favs, but what if Putin and the Iranian clerics do something
drastic if they feel they are backed into a no win situation? Venezuela is
getting close to default and that is having ripple effects on other emerging
markets.

I don’t mean to be so tough on the Fed as I don’t believe they are the cause of
all our present or future troubles. Nothing happens in isolation and they are
one piece of the puzzle as there are many other factors at play (e.g.
regulation, fiscal policy, etc.). Let’s hope the adjustment back to a more
normal monetary policy can be made without too much pain and disruption.

Could what is currently happening with the energy markets be a sign of things to
come? How far does the unraveling go? Does it become systemic or not? How much
is already priced in? No way to know until after the fact. One thing for
certain is that these type of events will create opportunities in the markets
that we have been waiting for.

Posted by paragonwealth on Friday, December 12, 2014 in Current Affairs,
Economy, Stock Market | Permalink | Comments (0)

TUESDAY, DECEMBER 09, 2014

THE YOUNG FAMILY AT THE FESTIVAL OF TREES

Each year the Young Family and friends donate a fully decorated tree to Primary
Childrens Hospital fundraiser called The Festival of Trees. There are over 800
trees at the festival, each with its own unique style: ornate, whimsical,
creative, humorous, classic, and sentimental. Every penny from the tree auction
at the Festival of Trees benefits children at Primary Children’s Hospital.

This year Cathy and team out did themselves, our tree sold for $6500! To see
pictures of the amazing tree Click Here.

The tradition of the Festival of Trees started for the Young Family after their
first Grandson Jack was born as an expression of gratitude to the doctors and
nurses at Primary Childrens Medical Center who saved baby Jacks life.

Jack had some major medical complications and the doctors only gave him a ten
percent chance of survival. He was in the intensive care unit at Primary
Children’s Hospital for almost four months. The nurses and doctors at Primary
Children’s did an excellent job and saved his life. He is now fully recovered
and a healthy, happy, six year old boy.

On behalf of all of us at Paragon Wealth Management, we would like to wish you a
Merry Christmas and Happy New Year!

Posted by paragonwealth on Tuesday, December 09, 2014 in Awards, Paragon Wealth
Management | Permalink | Comments (0)

FRIDAY, NOVEMBER 21, 2014

LEADING ECONOMIC INDICATORS SUGGEST GROWTH CONTINUED INTO 2015

Written by Nate White, Chief Investment Officer of Paragon Wealth Management

The Conference Board’s Leading Economic Index (LEI) rose in October by 0.9% for
its ninth consecutive gain. The consensus was for a gain of 0.6%. Eight out of
ten components posted improvements with all components strengthening over the
last six months. These figures suggest further upside momentum to growth and
are consistent with above-trend growth. U.S. growth continues to modestly
improve while growth in the rest of the world modestly decelerates. In the end,
I think fears of deflation unwarranted – especially in the US! Central banks
are still on track to provide substantial amounts of liquidity in 2015. The
question is where all that money will end up…

Posted by paragonwealth on Friday, November 21, 2014 in Current Affairs, Economy
| Permalink | Comments (0)

WEDNESDAY, OCTOBER 29, 2014

BUY AND HOLD

Written by Dave Young, President & Founder of Paragon Wealth Management

I was recently reminded of how much I disagree with the “Buy and Hold” concept
of investing. One of our clients, brought in several stock certificates that she
inherited from her family. They were dated from 1902 to 1920. That was a period
of time when mining companies were very popular with investors. She asked us to
research the current value of the certificates.

Her family held several of these certificates for over 100 years. Based on the
number of shares and their valuation levels it appeared that some of these
stocks had been valuable at one time. Unfortunately, her family had followed the
Buy and Hold investment strategy and still continued to hold them.

After some research, it turns out that one company had been sued into oblivion,
one morphed into another company and then that new company collapsed, one just
disappeared, one went bankrupt and another had financial fraud issues. Bottom
line, all of the stocks had gone from being valuable to becoming worthless….over
time. They bought and held just like the “experts” told them to.

While this may seem surprising, it really isn’t. Imagine if your relatives in
1920 had the foresight to buy the original 20 stocks that made up the Dow
Industrials average and held them until today. You would be very rich, right?
Your relatives had bought the largest, highest profile stocks available 94 years
ago. Actually, only six stocks (out of the original 20) from the Dow Industrial
Average still exist.

If you read our blog, you know that I am not a fan of the Buy and Hold approach
to investing. Actually, I get annoyed when I hear financial advisors and the
media espousing its virtues. Some advisors support it with such zeal that it
almost seems like it is a religious experience for them. I often wonder how many
of those advisors actually have their own money invested in a Buy and Hold
strategy.

The truth is that Buy and Hold works best sometimes and Active Management works
better other times. Different styles of management come in and out of favor over
market cycles. The big problem with Buy and Hold is that everything seems great
while the market is going up. However, as soon as the market starts going
sideways or down, then the Buy and Hold strategy becomes very difficult to stick
with. If you cannot stick with your strategy then it is likely that you will
never be able to generate good long term returns. If you aren’t going to
generate good long term returns, then what is the point of investing?

In both the 2000 and 2008 bear markets, investors who followed a Buy and Hold
strategy and invested in the S&P 500 lost roughly 50% of their value during
those bear markets. Many found it too difficult to stick with that strategy and
sold out of their investments near the bottom of the decline. Many investors
never recovered from their extreme losses.

John “Jack” Bogle of Vanguard is one of Buy and Hold’s biggest proponents. It is
hard to take him seriously when you understand that he has personally made a
fortune pitching the Buy and Hold strategy for years. He is definitely not an
impartial voice in the debate.

According to a November 28, 2013, Wall Street Journal article, Jack Bogle is
invested in his son’s fund. It is even more interesting when you realize that
his son, John Junior, has been managing a fund since 1999 that follows a very
active investment strategy that is the polar opposite of Buy and Hold. His fund
uses computer models to analyze earnings surprises, relative stock valuations,
corporate accounting issues, etc. His strategy is about as far away from a Buy
and Hold strategy as you can get. Even more interesting is that Jack (senior),
considered the unofficial spokesman of the Buy and Hold movement, is personally
invested in his son’s highly “Actively Managed” fund.

If John Bogle senior does not believe in using “Active Strategies”, then why is
he personally invested in a fund that follows a very active strategy? Why is he
paying higher fees than his index funds charge to invest some of his own money?
Interesting….

My belief and experience is that pro-active strategies, such as the ones we
follow at Paragon, require a lot more work to execute but provide the highest
probability for long term investment success.

As always, if your risk tolerance or investment objectives have changed, please
reach out to me or one of the members of our team, and we can discuss any
adjustments we need to make to your current plan. We appreciate the confidence
that you put in us.

Posted by paragonwealth on Wednesday, October 29, 2014 in Investment Strategy,
Stock Market, Wealth Management | Permalink | Comments (0)

WEDNESDAY, OCTOBER 22, 2014

ADJUSTMENT PERIOD

Written by Nate White, Chief Investment Officer of Paragon Wealth Management

The era of QE has been a difficult environment for active managers. The last
five years have been a heyday for the passive investor, aided directly and
indirectly by the Fed’s Quantitative Easing (QE) programs, stocks and bonds have
moved up in an indiscriminate manner. All one had to do was simply show up.
Bonds have been directly aided by the trillions the Fed has purchased while
equities have indirectly benefitted from the implied “put” or backstop inferred
by these Fed actions. The Fed’s actions to keep rates artificially low have
created market distortions that have interfered with many of our quantitative
indicators.

When all equities or bonds generally get rewarded the same regardless of their
quality or differences, it’s hard for the skilled manager to outperform. A
rising tide of liquidity has lifted all boats making it easy for anyone to
navigate in the harbor. But once the tide starts to recede, experience and skill
are what matters. We have seen improvement with our models over the last year
coinciding with the gradual reduction of QE. As markets return to “normal” we
are better able to assess the risk and rewards of certain moves and strategies.
We are seeing a number of opportunities develop that haven’t been available for
years.

In the short run the market is looking tired. We have rejected the doom and
gloom scenarios that have been so prevalent since the financial crisis and have
caused many investors to miss out on the bull market. However, fewer stocks are
hitting new highs and the breadth has been getting weaker. The uncertainty
surrounding the end of QE and the timing of rate increases next year are factors
contributing to the hesitancy. This is only natural and healthy in the long-run.
As previously mentioned it also creates opportunities for us that have not been
available for the last four years. Over the last few years we have held a cash
position which has been a drag on performance. Going forward, this cash position
is an advantage as it helps to cushion the downside and provide flexibility to
take advantage of opportunities provided by any volatility and uncertainty.

Although the risks have risen, this doesn’t mean investors should get out
completely. The market has been overdue for a correction for some time but it
doesn’t mean that everything is ready to fall apart. Getting completely out now
could cause you to miss crucial gains if stocks continue to rally as they have.
The last four years have shown the futility of trying to time the market in an
all in or out manner. It is still a bull market until proven otherwise.

The current economic data has been stronger indicating that the economic growth
is picking up instead of getting weaker. Ultimately that is a good sign as it
will support earnings growth that has been the key foundation for the current
bull market. Any correction that comes will probably be more short-term and
establish the next leg up for the market. Therefore, a correction would be
viewed by us as an opportunity rather than a harbinger of doom. It is only
natural after five years of market advances and ahead of interest rates starting
to move up to get some market hesitancy or disruption. Our current exposures are
to technology, energy, and materials which are late-cycle stocks and tend to do
well in rising rate environments. We also continue to favor various segments of
the healthcare sector such as medical device and healthcare providers. Several
emerging market opportunities are also looking more promising than in the past
and we have started to act in a few of these areas such as Mexico and Brazil.

It is no secret that we have been cautious on the bond market for some time. As
the sun sets on QE the angst over when the Fed will begin to raise rates and by
how much is growing. Markets always like to price actions in ahead of time and
right now it seems the equity market is being affected to some degree by this
interest rate uncertainty. However, the bond market has not moved much yet. Many
thought that bonds would have a difficult year as they began to price in rate
increases. So far, bonds have done the opposite and surprised many by having a
good year. The inevitable is coming though and the window for bond gains is
closing as we creep toward June of next year which is the most accepted time for
rate increase to begin. Any equity market weakness will give bonds more time to
put off the reckoning.

Although the potential for a bloodbath in the bond market is high, that doesn’t
mean it will happen. It will probably be more like death by a thousand cuts. The
Fed will be very slow and steady in raising rates as to minimize market
disruption. After all, they do hold about $4.5 trillion of bonds! Even if
interest rates rise in a slow and gradual manner (which is what I believe will
happen) bonds will still produce negative or flat real returns at best.

For example, take a look at the interest rate sensitivity of a broad composite
of investment grade bonds such as the Barclays US Aggregate Bond Index. If
interest rates are a half to one percent higher a year from now, the index could
be down 2.5 to over 5 percent respectively. The current yield of about two
percent would still not offset the losses.

In preparation we have been making changes and getting ready for the coming
environment. We have been early on this call which has caused us to underperform
in Managed Income this year so far, but not by a lot and we are better
positioned for what is to come. We believe this approach is the most effective
from a risk/reward standpoint and will pay off in the environment to come. Now
is the time to take a look at the risk in bond or fixed income holdings and make
adjustments. The first one to two percent moves from the bottom will be the most
painful.

Posted by paragonwealth on Wednesday, October 22, 2014 | Permalink | Comments
(0)

WEDNESDAY, OCTOBER 15, 2014

LOOKING PAST SCARY FINANCIAL NEWS HEADLINES

Written by, Dave Young, President & Founder of Paragon Wealth Management

I encourage you to learn more about investing and planning. It will pay
dividends in many ways, and we are here to assist you as you take steps to
educate yourself.

But I caution you about spending too much time in front of the financial news
channels dotting the cable landscape or the many Internet sites that are just a
mouse click away.

It’s not that they don’t report hard news. They do. But there are times when
markets get volatile and the “shrillness meter” hits alarming levels.

Just a couple of months ago, when the Dow fell over 300 points in one day, I
went onto the MarketWatch website and found a section highlighting the most
popular stories.

1. “Warning: the Plunge in Stocks Is Just Beginning.” Well, stocks quickly
recovered and claimed new highs.

2. “S&P 500 Suffers Largest Weekly Loss in 2 Years.” True, but we emphasize the
longer term and continually stress that your plan should take into account
setbacks in the market. Be very careful of allowing weekly volatility sidetrack
a multiyear plan.

3. “Three Market Warning Signs that Predict a 20% Tumble.” See my comment on
article number one, above.

The top three stories were playing on the fears of investors. Simply put, bad
news sells. But it can be confusing if the noise isn’t filtered.

It’s been over 570 days since we’ve had a 10% drop in the S&P 500 Index, or a
decline that would officially be called a “correction.” Going back to mid-1940s,
the median time period between corrections has been 121 trading days, and the
average has been 273 trading days.

Markets never move up in a straight line and we are due for a 10% pullback,
which, coupled with the expanding economy, would be healthy. No one can
accurately predict when that might occur but it will happen. The portfolios we
recommend have a long-term time horizon and are designed to help you achieve
your personal financial goals.

Stay focused on your goals and make adjustments that take into account changes
in your personal circumstances. Ignore fear-mongering that can be deafening
during market volatility.

Posted by paragonwealth on Wednesday, October 15, 2014 | Permalink | Comments
(0)

Older »

DOWNLOAD "HOW TO SELECT A FINANCIAL ADVISOR"

THE TOP SEVEN QUESTIONS YOU SHOULD ASK

Learn:

* How to identify the top 15%
* Why a track record is so crucial
* How you should be paying your advisor
* And more

* Email * First Name * = Required Field

PARAGON WEALTH MANGEMENT

* Learn more about Paragon

Email Me

ABOUT

PAGES

* Dave Young, President and Founder
* Nathan White, CFA
* Paragon's Performance Numbers

FACEBOOK

www.moneymanagerslive.com Open in urlscan Pro 104.18.136.190 Public Scan

Form analysis 2 forms found in the DOM

Name: icpsignup — POST https://app.icontact.com/icp/signup.php

GET https://www.moneymanagerslive.com/.services/blog/6a00e54fa07ce2883300e54fa07ce38833/search

Text Content

www.moneymanagerslive.com Open in urlscan Pro
104.18.136.190 Public Scan

Form analysis
2 forms found in the DOM