Market Commentary

June: A Confluence of Positives

By Paul Hoffmeister, Chief Economist

During the last month, we’ve seen a confluence of positives in some of the major macro variables: Fed policy, trade and Brexit.

To us, the latest macro developments are very encouraging. But the equity market outlook remains tricky, and we do not believe it’s a one-way ticket up in equities for the third and fourth quarters.

My biggest concern at the moment is the slowing global economy, which is permeating into the United States.

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During the last month, we’ve seen a confluence of positives in some of the major macro variables. Most notably, Chairman Powell said on June 4th that the FOMC was prepared to act in response to the economic outlook, including the trade disputes with China and Mexico.[i] His comments suggested that interest rate cuts were on the horizon, sparking a 2.1% rally in the S&P 500 for the day.[ii] The rally marked the beginning of the recent turnaround in equities after the weakness we saw in May. 

Arguably, the Fed outlook has been the most important macro variable of the last year. From our perspective, Powell’s comments on October 3rd that the fed funds rate was a long way from neutral catalyzed the beginning of the multi-month selloff in equities, and his pledge on January 4th that the Fed would be patient with any further rate increases laid the foundation for this year’s rally. [iii][iv] And now more recently, we have Powell seemingly coming to the stock market’s rescue.

During the last month, we’ve also seen positive developments on trade and Brexit.

Of course, Presidents Trump and Xi agreed to restart trade talks during the G20 meeting at the end of June. Trump promised to hold off on putting a 25% tariff on nearly $300 billion of Chinese imports, and he lifted some restrictions on Huawei. Meanwhile, Xi reportedly promised to start large scale purchases of American food and agricultural products.[v]

In addition to renewed hopes for a US-China trade deal, American and Mexican negotiators reached a deal on June 7th in which the Mexican government agreed to take new measures to curb the influx of Central American migrants into the United States. This averted new tariffs on Mexican imports.[vi]

There was also some good news on the Brexit issue. While Brexit still appears to be on track to occur by October 31st, Boris Johnson -- the frontrunner to become the UK’s next prime minister – has promised to cut personal income and corporate taxes. This follows Jeremy Hunt, another contender for Prime Minster May’s job, who wants to reduce the UK’s corporate tax rate from 19% to 12.5%.[vii]

As we’ve stated in the past, news during the last year of a Brexit divorce not occurring seems to have been received positively by financial markets. Nonetheless, we’ve believed that Brexit could happen without being disruptive to markets if it was combined with new, pro-growth policy measures. Major tax cuts (such as lowering the UK’s corporate tax in line with Ireland’s 12.5% rate) and new trade deals (Trump keeps dangling a major post-Brexit, US-UK trade deal) could be exactly the pro-growth package that turns Brexit from a market negative into a market positive.

The confluence of positives related to interest rates, trade and Brexit appear to have been the predominant catalysts behind the strong equity market performance in June. This begs the question, do we have clear skies for the remainder of the year? After all, it appears that we have a Fed that won’t be raising rates, the US and China will continue to negotiate their differences, and Brexit could go through more smoothly than expected.

To us, the latest macro developments are very encouraging. But the equity market outlook remains tricky, and we do not believe it’s a one-way ticket up in equities for the third and fourth quarters.

My biggest concern at the moment is the slowing global economy, which is permeating into the United States.

As we’ve shown in recent months, GDP for the major foreign economies (China, Japan, Germany and UK) has been slowing, while US GDP has been accelerating. But economic data at the margin suggests that the strength in the US could fade.

According to the Institute for Supply Management, the US Manufacturing PMI Index peaked at 60.9 last August, and June’s reading was 51.7 – down from 52.1 in May and 52.8 in April. [ix] Note, readings below 50 signal contraction in the manufacturing sector. We have warned that should this reading fall to 50 or less, the US economy will be at a heightened risk of entering recession.

It’s economic deterioration such as this that likely underpins the Fed’s motivation to reduce interest rates, despite the fact that the S&P 500 is trading near all-time highs. 

As we see it, the good news is that June brought positive macro event catalysts, and holding all variables constant, one or two quarter-point rate cuts by the Fed could get the Treasury curve out of inversion. But the current inversion in the Treasury curve should be respected, and it will be important to see global economic growth stabilize after almost a year of deceleration.

 

Paul Hoffmeister is chief economist and portfolio manager at Camelot Portfolios, managing partner of Camelot Event-Driven Advisors, and co-portfolio manager of  Camelot Event-Driven Fund  (tickers: EVDIX, EVDAX).

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Disclosures:

•       Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended by the adviser), will be profitable or equal to past performance levels.

•       This material is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product or concept for any particular advisor or client.  These materials are not intended as any form of substitute for individualized investment advice.  The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own.  Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisors.  Camelot Portfolios LLC can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.

•       Any charts, graphs, or visual aids presented herein are intended to demonstrate concepts more fully discussed in the text of this brochure, and which cannot be fully explained without the assistance of a professional from Camelot Portfolios LLC.  Readers should not in any way interpret these visual aids as a device with which to ascertain investment decisions or an investment approach.  Only your professional adviser should interpret this information.

•       Some information in this presentation is gleaned from third party sources, and while believed to be reliable, is not independently verified.

[i] “Stocks Jump as Fed’s Powell Suggests Rates Could Come Down”, by Jeanna Smialek and Matt Phillips, June 4, 2019, New York Times.

[ii] Ibid.

[iii] “Powell Says We’re a Long Way from Neutral on Interest Rates, Indicating More Hikes Are Coming”, by Jeff Cox, October 3, 2018, CNBC.

[iv] “Powell Says Fed ‘Will be Patient’ with Monetary Policy as It Watches How Economy Performs”, by Jeff Cox, January 4, 2019, CNBC.

[v] “Trump and Xi Agree to Restart Trade Talks, Avoiding Escalation in Tariff War”, by Peter Baker and Keith Bradsher, June 29, 2019, New York Times.

[vi] “Trump Announces Migration Deal with Mexico, Averting Threatened Tariffs”, by David Nakamura, John Wagner and Nick Miroff, June 7, 2019, Washington Post.

[vii] “Boris Johnson Promises Tax Cut for 3m Higher Earners”, by Rowena Mason, The Guardian, June 10, 2019.

[viii] Squawk Box, June 27, 2019, CNBC.

[ix] “US Factory Gauge Drops Less Than Forecast But Orders Stall”, by Katia Dmitrieva, July 1, 2019, Bloomberg.

[x] “US Services Gauge Drops to Lowest Since 2017”, by Jeff Kearns, July 3, 2019, Bloomberg.

 

First Quarter Market Commentary

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First Quarter Market Commentary

by David Munn

If you happen to be an investor who only checks your portfolio every 6 months--and your last check was at the end of September--you might think the markets have been serene and uneventful over that time period, having experienced very little change.  But alas, your conclusion would be wrong, though you would have enjoyed the tremendous benefit that comes from not following the day to day turmoil to which other investors willingly subject themselves.

Since reaching new highs in September of 2018, the market has taken stockholders on a roller coaster of prices and emotions.  A fourth quarter that at one point saw price declines around 20%, and included the worst December since the Great Depression (1931), the worst single month (December) since the Great Recession (Feb 2009), and the worst Christmas Eve plunge ever, was followed by a significant rebound in the first quarter, including price increases of 20% or more over the Christmas Eve lows for many parts of the market.

In other words, there has been a lot of movement to essentially go nowhere.

Meanwhile, the bond market and more conservative side of the investment spectrum, which had a rough ride for much of 2018 as interest rates rose precipitously, has also experienced a sharp recovery from fourth quarter lows. 

As we communicated in our previous commentary, we believe the Federal Reserve’s decision with regard to interest rates and global trade agreements were driving much of the Q4 volatility, and would be a primary factor in 2019. Both of these issues appear to be trending favorably in the eyes of investors, and are not commanding the headlines they were several months ago.

Instead, the focus appears to be shifting to the strength of the global economy, the timing and inevitability of the next US recession, and--heaven help us all--the politicking and posturing that is the 2020 Presidential election that is still 19 months away.

All these factors point to continued choppiness in the markets, which we view as a long-term positive for investors, unless you watch your portfolio daily and have untreated high blood pressure.  For your sanity and health we would recommend you address both those issues.

https://www.cnbc.com/2018/12/31/stock-market-wall-street-stocks-eye-us-china-trade-talks.html

https://www.nbcnews.com/business/markets/dow-drops-653-points-worst-christmas-eve-trading-day-ever-n951661

The Seven Money Types

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By David Munn

In 1995, author Gary Chapman released his book, The Five Love Languages: How to Express Heartfelt Commitment to Your Mate, which has gone on to be a long-term best seller. The premise is that there are 5 ways to express and experience love, called “love languages”, and we each respond differently to each one.  The five love languages are:

  • Receiving gifts

  • Quality time

  • Words of affirmation

  • Acts of service

  • Physical touch

For couples who don’t share the same love languages--which describes most couples--this insight undoubtedly created many “aha” moments as to why they didn’t necessarily feel loved at times by their partner, or why their partner didn’t respond in an expected manner to an expression of love.
 
In a similar vein, author Tommy Brown recently released his book, “The Seven Money Types”, which seeks to identify the differences in how we are each wired to handle money.
 
We have all, at one time or another, observed and been perplexed by the seemingly irrational financial decision(s) made by someone else, whether a spouse, child, or acquaintance.  Though they may not have given the decision a second thought, your perspective was that it was wasteful, foolish, and possibly even irresponsible. 
 
While many of us tend to naturally identify as either a “spender” or “saver”, our decision making process in both spending and saving is more complex.  Brown makes the case that there are seven different money types, each of which is guided by a basic belief, a key characteristic, and a shadow side--or a potential flaw of our money type. Following is a summary of each:

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Without even reading the book, most of us will naturally identify with one or more money types, and may also find an accurate description of a spouse, child or friend whose financial behaviour has been at times perplexing. 
 
One of my first thoughts when reading this for the first time was of a pastor who I had a close relationship with in college. He would spend a large portion of his day going from restaurant to coffee shop, meeting with college students whom he was mentoring.  I found this to be extremely wasteful and financially irresponsible for a poor pastor with a family to feed(I identify strongly with both the “Discipline” and “Endurance” types), but I now realize that based on his money type, “Connection”, he felt the best use of his limited resources was to buy food and coffee for poor college students, because that’s about the only way they would make time to meet!
 
While I would not make the same decisions if I was in his position, it was enlightening for me to recognize that his decisions were not necessarily wasteful or irresponsible; we are simply wired for different outcomes and different values.
 
If financial decisions have ever been a point of conflict in a relationship--particularly with a spouse or child--take some time to identify the money type of everyone involved, and consider how that impacts everyone's different perspectives on the situation.

Seeds for Sowing

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by Grant Sims

As we look back on life there are memories of difficult times, chapters of progress, and defining moments that tell a story of how we became who we are. We recognize that skipping any hard part or successful achievement could have led us somewhere different. Knowing the journey was worth it, we reflect with a feeling of adventure, satisfaction, and joy for where it has brought us.

This is exactly where we find Mike and Cindy Stein. They are looking back over the years since they got married and are amazed at the journey that brought them to their present joy! Twenty-five years ago they had no emergency fund, no savings plan, and were not sure how they would ever retire.

It was their desire for Cindy to be a stay-at-home mom that drove them to live as frugally as possible. In order to live off just Mike’s salary, they reduced their expenses and eliminated their debt (other than house and car payments). Cindy said, “We were able to live, but there was nothing to save.” 

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While living in Chicago, they attended a Crown Financial Study at their church and learned more about the importance of prioritizing savings and giving back to God first. This was the first time the order in which you give back really jumped out at Mike. Most people he knew made money and spent most, or all of it, before thinking about giving. In the meantime, Cindy already had a generous heart but she was waiting and praying for years that Mike would gain the same perspective in this area of their finances. Wishing they would have gone through a course like this long before, they felt a strong conviction to make serious changes to their finances.

First, they made the decision to move to a city with a lower cost of living, then started implementing the steps from their financial class by establishing an emergency fund and utilizing the retirement plan at Mike’s new job.

Not long after that Mike and Cindy attended an event for his work where the speaker, an extremely generous giver, shared his story of increasing his giving by 1% every year and the impact it had on his and his wife’s perspective on life and money. This story encouraged Mike and Cindy to take this same step of faith and start to increase their giving 1% each year going forward, starting at the 10% they were already committed to.

Years later, Mike and Cindy decided to pursue a business venture that would help supplement their income.  They like to joke that even though this particular business venture was Mike’s idea, Cindy was the one that ultimately ended up running it.

After years of managing the business and significantly increasing its value, Cindy was tired and ready to sell.

When they approached Munn Wealth about the tax ramifications of selling their business, knowing both their story and their hearts for generosity, it was clear they could benefit from utilizing a Donor Advised Fund (DAF).

In simple terms, a DAF is a giving account that allows donors to make a charitable contribution, receive an immediate tax deduction and then recommend grants from the fund over time. A DAF can be funded with cash, securities, or other appreciated assets.  It is an easy sell when you have the opportunity to increase your giving by 15-25% or pay that percentage to Uncle Sam.

Upon hearing of this opportunity, Mike and Cindy were excited about the potential to save thousands of tax dollars on the sale of their business and designate additional money for future giving.

Remember that promise to increase giving by 1% each year? Well that was 15 years ago and they have been faithful to give 12 . . . 18 . . . 21 . . . and now 25% of their income. When it came time to decide how much they wanted to give, they did not base it off tax savings or how much they needed to keep so they could retire right away, they wanted to honor their promise and continue their current giving level – 25% of all their sale proceeds.

Most people would have a terribly hard time giving away 25% of their income or the proceeds of a business they worked so hard on, but as Mike and Cindy shared their story they could not have been more excited about the impact these dollars will have on the charities they support or the new ones they will now be able to help fund.

Mike and Cindy recognized their decision to grow in generosity had an amazing impact on their lives and wanted to share that in a special way with their children. What better way to teach generosity than to provide your children with the opportunity to be generous, especially if they don’t have the financial means to do so?

They called a family meeting. Their daughters were skeptical; “Are mom and dad moving to Mexico? Taking a trip around the world? What is going on?”  They shared their story of generosity and faithfulness, followed by telling their daughters that when they opened and funded their own DAF they decided to open and fund one for each of their daughter’s families too. It was a gift--not cash to be spent, but to be given away. Their desire was for each family to identify causes they were passionate about and find nonprofits to support that are focused on that specific cause.    

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That night and the following days were full of conversations about how they wanted to use the money. One family feels very passionate about underprivileged kids and schooling, and the other about international missionary work. They are now in the exciting phase of selecting  which nonprofits will best use their money and how much to give each.

 “This whole thing was so fun,” Mike and Cindy agreed.

For their own DAF, which they named, “Seeds for Sowing”, Mike and Cindy have chosen to focus their giving on helping nonprofits improve their donor management and engagement, as this is closely tied to the work Mike does. They believe there is a great opportunity to impact organizations through the development of better systems and fundraising plans.

It’s a pleasure to be a part of Mike and Cindy’s story and observe their joy and gratitude for what has happened, and their enthusiasm and excitement for the impact their generosity will have.

Changes to Be Aware of For Your 2018 Tax Return

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By Drew Steinman

The arrival of 2019 brings with it the 1099s, W-2s, and other important tax documents that grace us with their presence. These of course serve as friendly reminders that tax season is upon us and that April 15th is coming whether we like it or not. However, these taxes aren’t like taxes of the past. Those filing, both personal and business returns, will find many changes when preparing their 2018 taxes.

One of the largest, and most welcome, changes is that most taxpayers will find themselves in a lower tax bracket for their 2018 taxable income. The chart below demonstrates the tax bracket changes for Married Individuals Filing Joint Returns and Surviving Spouses from 2017, on the left-side of the chart, and 2018, the right side. Most of the 2018 taxable income amounts increase, while many of the tax bracket percentages decrease.

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Despite this being very considerable change in the tax law, it is hardly the only change. Another alteration is that the standard deductions have increase significantly. The standard deductions for single taxpayers now stand at

$12,000, up from the previous total of $6,350; the deduction for married individuals filing jointly deductions have increased to $24,000 rather than the previous total of $12,700.

Although the standard deductions have increased, the itemized deductions for state and local taxes (including income, property, and sales tax) are now capped at a total of $10,000. Miscellaneous itemized deductions from tax preparation, work-related expenses, and investment fees have been eliminated. The changes in the itemized deductions, paired with the in-crease in standard deductions, means that most taxpayers will no longer itemize their tax returns.

More changes coming to your 2018 taxes include the elimination of personal exemptions. The $4,050 that could have been exempt previously, has been retired, however, the Child Tax Credit has increased from $1,000 to $2,000 per eligible child.

Finally, one modification that business owners (Sole Proprietorships, S-Corporations, and Partnerships) will find during their tax preparations is a 20% deduction on business income. This is a welcomed sight, but also based on eligibility and subject to certain limitations, including a phase-out for certain businesses with more than $315,000 in taxable income and more than $157,500 for single filers.

Keep in mind that this is certainly not a comprehensive list of all the changes regarding your 2018 taxes, but some important ones that will affect most people filing. Be sure to consult your tax preparer for more information when it comes to the full list of changes in the tax law.

Disclosures

Information presented herein is based upon facts derived from publicly available information, and is also based on certain assumptions, including that there are no additional changes to current tax law, and that demographic information regarding retirement plan contributions also remains unchanged.

Fourth Quarter Market Commentary

by David Munn, CFP

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As the ball dropped in Times Square on New Year’s Eve, many investors likely breathed a collective sigh of relief that 2018 had come to an end.  A year that started with a strong surge for stocks ended with the worst December since the Great Depression1, resulting in the worst calendar year since the Great Recession crash of 20082.  In the following commentary, Paul Hoffmeister, Chief Economist for Camelot Portfolios, analyzes the factors that caused the markets to behave how they did, and looks ahead to what 2019 might hold.

Summary:

  • The primary macro variables driving equities in 2018 appeared to be the Fed and US-China trade. Positive news in both during 2019 are likely to spark a strong rally.

  • Market volatility and seemingly abrupt weakness in US manufacturing will likely cause the Fed to raise the funds rate once this year, if at all. Meanwhile, political and economic pressure should cause President Trump and Xi to reach a partial trade deal.

  • During Q4 2018, the S&P 500 Index declined 14.0% (not including dividends). Prior to the last quarter, the S&P 500 has experienced 16 quarters since 1970 in which the index has declined 10% or more. The average return in the S&P 500 four quarters later was 16.1% (not including dividends). In only four instances did the S&P 500 suffer a negative return 4 quarters later.

  • For us to become worried about an approaching recession, we need to see US manufacturing and employment conditions worsen significantly more.

When we look back at the ups and downs of the stock market in 2018, three things are apparent to us: 1) the two primary macro variables moving equities last year were the Fed and US-China trade; 2) nervousness about aggressive Fed policy led to the two 2 major market selloffs (in February, and then between October and December); and 3) positive and negative news in US-China trade negotiations led to a lot of the intervening market volatility.

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As 2018 closes, we believe that market participants have heavily discounted for excessively aggressive Fed policy in 2019 and, at best, a 50/50 probability of Presidents Trump and Xi reaching a trade deal. This suggests that positive news from both variables – such as no rate increases in 2019 and at least a partial US-China trade deal – will ignite stocks.

As we assess the monetary and trade variables today, we’re seeing encouraging signs, leading us to believe that the worst is over for equities during the near-term and that 2019 will see a strong rally.

First, Fed officials appear to have been caught off guard and worried about the significant stock market weakness following the December 19 FOMC meeting where the Committee telegraphed a policy trajectory wildly out of line with market expectations.3 The Committee collectively expected two more quarter point rate increases in 2019, whereas the futures market is currently expecting not even a single rate hike.4 The ensuing stock market selloff appeared to have led New York Fed President John Williams to go on CNBC on December 21 in order to soothe markets. He indicated that Fed rate forecasts in 2019 were not promises, and the Fed will adjust if necessary.5 Willliams said, “We’re going to go into the new year with eyes wide open, willing to read the data, listen to what we’re hearing, reassess our economic outlook and take the right policy decisions that will keep this economy strong.”6

The manufacturing surveys of the last month are showing, in our view, that the slowing housing market and declining oil prices are creating stresses in key segments of the economy. Furthermore, and perhaps more importantly, the specter of aggressive Fed policy that seeks to limit growth, which has been omnipresent since February and especially pronounced since October, is arguably restraining economic activity and risk taking more than many appreciate.

In sum, as we assess the weakening economic data and the apparent concern on John Williams’ part over the recent market panic, we expect Fed policy to shift decisively dovish in 2019. And if monetary policy is the most important macro variable today, as it seemed to be in 2018, then it should hold that the indications of such a shift will spark a strong equity market recovery.

There are also encouraging signs in the US-China trade variable. On December 29, President Trump announced via Twitter that he had a “long and very good call” with President Xi, and that a “deal is moving along very well!”7 We continue to be more optimistic than many that at least a partial trade deal will be reached, as the pressure seems to be severe on both leaders to strike a deal.

Of the myriad risks and uncertainties around the world, and their potential impact on markets, we are especially concerned that markets could react negatively to political instability in the United States, stemming from the Mueller investigation.

Our base case for equity markets in 2019, however, is that this scenario will be avoided. It is probably most likely that the Mueller investigation will inflame both parties in Washington, but ultimately, given the rebuke Republicans received in the 2018 midterms, Democrats will avoid impeachment proceedings and let voters decide President Trump’s fate in the 2020 election cycle.

Meanwhile, we expect the Fed will back off its rate-hiking cycle and raise the funds rate only once in 2019, if at all; and Presidents Trump and Xi will reach a partial US-China trade deal.

1.       https://www.cnbc.com/2019/01/07/investors-flee-stock-and-bond-funds-in-record-numbers-amid-equity-panic-in-december.html

2.       https://www.cnbc.com/2018/12/31/stock-market-wall-street-stocks-eye-us-china-trade-talks.html

3.       “Why 2019 Could Be Very Good Year for Stocks, After Worst Year in Decade,” by Patti Domm, December 31, 2018, CNBC.

4.       Ibid.

5.       “Fed Official Tries to Soothe Nervous Investors,” by Binyamin Appelbaum, December 21, 2018, New York Times.

6.       Ibid.

7.       “Trump Hails Call with China’s Xi, Says Trade Talks Are Making Good Progress,” December 29, 2018, Reuters.

 

 

Disclosures

•       Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended by the adviser), will be profitable or equal to past performance levels.

•       This material is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product or concept for any particular advisor or client.  These materials are not intended as any form of substitute for individualized investment advice.  The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own.  Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisors.  Munn Wealth Management can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.

•       Any charts, graphs, or visual aids presented herein are intended to demonstrate concepts more fully discussed in the text of this brochure, and which cannot be fully explained without the assistance of a professional from Munn Wealth Management.  Readers should not in any way interpret these visual aids as a device with which to ascertain investment decisions or an investment approach.  Only your professional adviser should interpret this information.

•       The S&P 500 is an unmanaged index used as a general measure of market performance.  You cannot invest directly in an index. Accordingly, performance results for investment indexes do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing historical performance results.

The Gift of Story

by Laura Noble Walker, JD

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A friend of mine was recently packing up her home of 20 years as she and her husband prepared to downsize in preparation for retirement.  She came across an answering machine!  Anyone still have an answering machine?  There were 23 messages on the answering machine; they were all from my friend’s grandmother who prior to her death 5 years ago would call often “just to stay in touch and make sure my friend and her family were happy and doing well.” The emotion my friend was experiencing as she listened to several of the messages was apparent…sad her grandmother was no longer with her, but joyful to hear her beloved grandmother’s voice. 

I lost my grandmother many years ago.  There have been times when I wish I could ask for her advice or get her perspective on a situation.  She was strong in her faith and had a significant role in my personal faith journey.  I do have her Bible; the pages worn and marked with her handwritten notes; her notes have helped to tell me her story. 

The impact of story.  Who we are, what we have experienced, the lessons we have learned...they matter; they tell our story.  And stories are meant to be shared.   

As an estate planner, I often share with clients and their families the statistic that 90% of families fail to keep their family and their wealth together for more than three (3) generations.[i]  This statistic is not necessarily the result of inadequate traditional financial and estate planning, but more likely the failure to emotionally prepare the family for the wealth they inherit.  One way to possibly overcome this is to provide the family with pre-inheritance experiences where the family can work together, make decisions together and have fun together!  A recent study re-confirmed that families are more comfortable in discussing legacy than they are inheritance because legacy captures family traditions, stories, life lessons and values.[ii]

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As we approach the holiday season, and we gather with our families, might we take the opportunity to ask our loved ones meaningful questions such as:

What are three of the most exciting events of your life?  The most disappointing or challenging?

What are the most important lessons you have learned in life?

Who has been an influential person in your life?

These questions can be asked of family members at all stages in life:  children, young adults, mature adults and seniors.  Consider documenting these conversations in the form of letters or audio recordings.   Documenting these conversations can allow them to be enjoyed in the future and shared with generations of your family. 

[i] Perry Cochell and Rod Zeeb, Beating the Midas Curse, Second Edition 2013, Page 13

[ii] Allianz American Legacies Pulse Survey, 2016