"The Big Chill Stall"

Jeffrey D. Saut, Chief Investment Strategist, (727) 567-2644, Jeffrey.Saut@RaymondJames.com June 12, 2018 Investment Strategy

It was last week when we wrote that the equity markets were likely to “stall” into the first part of this week due to the short-term lack of internal energy.  So it was written and so it has happened, as stocks have “stalled” since last Thursday.  However, the “stall” should end shortly, leading to new all-time highs in the weeks ahead.  Quite frankly, we did not think there would be anyone more bullish than Leon Tuey and me, but I was wrong, for one Geneva-based portfolio manager emailed us this yesterday, from a strategist at Zacks:

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Tech Trends for At-Home Seniors

Tech Trends for At-Home Seniors

Advances in digital home technologies can help retirees maintain healthier, happier lives as they grow older.

June 5, 2018

As more seniors opt to age in place, staying true to the life they’ve built, advances in digital home technologies can help them maintain healthier, happier lives as they grow older. Here are just a few of the in-home trends that could help make those years golden.

Home monitoring systems use sensors to track a person’s movements, which can indicate potential safety or health-related problems while being less invasive than a camera. Caregivers can be notified if something appears amiss.

Technology similar to hospital monitoring devices gathers critical information about users’ vital signs during normal sleep cycles, allowing them to note trends that may indicate health issues.

The grandPad – a closed-system (meaning it can’t be updated and users can’t surf the internet) tablet – allows tech-challenged users to connect with loved ones through video chatting, voice emails and photo sharing. Limited additional features, such as games and weather info, are included.

Automatic pill devices dispense the correct dosages, then signal it’s time to take the medication with an alarm and/or flashing lights. Optional services include the ability to alert caregivers when loved ones take their pills (or when they don’t). Several offerings are available.

Alarm clocks with myopia-friendly readouts remind users of important tasks and appointments (up to 25 per day), alleviating some of the stress of keeping tabs on loved ones.

More innovations are on the horizon. One potentially life-saving one? The Inirv React (in Beta development) monitors levels of smoke and flammable gas in the home, and lets users remotely control the temperature of their stoves using their smartphones.

Sources: mytrusense.com; alarm.com/wellness; earlysense.com; grandpad.net; reminder-rose.com; inirv.com/home

10 Common Scams and How to Avoid Them

Familiarize yourself with these common swindles, often targeting retirees.

June 4, 2018

As we age, we may become more susceptible to fraudsters who make a living preying on retirees. This can be especially true for widows and widowers who are making decisions alone and may be particularly trusting of friendly strangers. In order to protect ourselves and those we love, it’s important to be aware of the most common scams older Americans fall for.

1. Lottery Scam

You get an unsolicited phone call or email saying you’ve won a large prize. All you need to do is send money to pay for shipping, taxes or some ancillary fee. You send the money, but the fictional prize never arrives.

2. Grandchild Scam

Your grandchild calls to confess her troubles. Or so you think. It’s not uncommon for someone posing as your grandchild to call and, preying on your compassion, claim to be in a crisis situation and need money urgently. She may also beg you not to call her parents (which would give the scam away).

3. Charity Scam

You donate to one charity and end up being on every charity list. That’s because they sell your name, phone number and email to other nonprofit and commercial organizations. These could include companies with similar names to charities you support – but they exist solely to scam donations.

4. Computer Scam

Someone calls pretending to be from a major company, such as Microsoft, and says he can see that your computer has a virus. He offers to help you get rid of it by asking you to log into a website that lets him control your computer – then steals your ID information.

5. Timeshare Scam

If you own a timeshare, you may get a call from someone claiming they’re authorized to sell it for you, for a fee. After paying, however, you never hear from them again.

6. Homeowner Scams

A man comes to your door and offers to clean your gutters or trim your trees, which sounds like a good idea. Until he asks for prepayment and never completes the job.

7. Medical Scam

You get an unsolicited call about a discounted price for some kind of medical equipment (i.e., heart monitor, wheelchair or bathtub bench). He asks for a deposit and your personal information or Medicaid number to send the equipment, which never arrives.

8. Foreclosure Scam

You’re approached by a “professional” who claims your home is under threat of foreclosure and offers to pay off your mortgage or taxes if you sign over the deed to the property. With your deed, the fraudster can then refinance the mortgage for the full value of your home and take the money. Keep in mind, even if you sign over a deed to someone, you are still liable for your mortgage obligations.

9. Caregiver and Sweetheart Scams

These predators claim to care deeply for you or your well-being, but after winning your trust, they gain access to your accounts to steal money or identity information.

10. Title Company Scam

Before purchasing or closing on a new property, a scammer intercepts an email from your realtor or title company. You’re then sent fraudulent payment instructions to complete the transaction. Red flags include last minute changes to instructions, a change in tone or word choice from prior emails, a new sender address and multiple payment requests.

These scams are common and widespread. But speaking with trusted loved ones or your financial professional before making decisions can help you avoid these traps. Additionally, keep in mind these tips for staying safe:

• Don’t pay for things you don’t remember ordering.
• Don’t give your personal information to unknown third parties.
• Work with financial institutions that use fraud protection to safeguard your credit card and banking information.
• Don’t click links in the body of suspicious emails, especially if they claim to come from your bank, credit card company, realtor or title company. Instead, log in to the company’s official website or call them directly to verify.
• Don’t let strangers into your house. Instead, ask for a business card and say your spouse, kids or lawyer will be in touch.
• Be wary of caregivers and suitors, especially if you notice signs of substance abuse or other red flags.
• Limit the purchases and donations you make by check, which may list your home address or other key data.

Again, the World Looks to Italy

European Strategist Chris Bailey discusses Italian politics and the euro's recent drop.

May 30, 2018

“Failure is simply the opportunity to begin again, this time more intelligently.” – Henry Ford

Italy. Just when you thought it was all over, a dramatic final twist threw everything back up in the air, and a surprise leader emerged. But enough about this year's Giro d'Italia cycle race and back to the well-trodden area of Italian politics.

Thinking back a couple of weeks, my broad conclusion was that if a populist Italian coalition emerged, then so be it. The recent historic travails of Greece's populist ruling party, the reality pressures of the fixed income markets and – hopefully – some combination of anti-corruption efforts and lower taxes from the populist coalition, together with a positive and engaging reform summit in late June led by Angela Merkel and Emmanuel Macron, would provide some kind of European investment opportunity.

However, last weekend's annulling of the populist dream by the Italian President, irked by the anti-euro personnel choice for finance minister, was, in my opinion, a poor move. This is certainly within the constitutional remit of the President, but there is a deeper backlash risk now from an electorate already suffering from an inability to believe. A technocrat sticking plaster for the next government – headed by a former International Monetary Fund official nicknamed “Mr. Scissors” for his budget cutting preference – is certainly more palatable for the markets, although politically unsustainable. I would have stuck to the plan outlined in the paragraph above: look to inspire through positive action, working with whomever can put together even a potentially unstable coalition. Net result: bond spreads pushed out to levels not seen for a few years, market contagion, and – surely – an early autumn election.

So whilst Rome fiddles, regional financial markets relatively burn, with the euro down to levels last seen late last year against the U.S. dollar, the last weekly regional outflow data the worst since a couple of weeks after the Brexit referendum result, and Italy's stock market now down in year-to-date terms. Even famous financial speculator and philanthropist George Soros was moved to say “the EU is in an existential crisis. Everything that could go wrong has gone wrong … it needs to reinvent itself.”

I certainly agree with the latter point, which naturally brings up the summit in a month's time, a subject on which both Macron and Merkel have uttered the “reform” word in recent weeks. Of course words are cheap, but the instinct is correct, and the need to inspire leadership is key. The start of the fightback should begin with the positioning and rhetoric around the newly unveiled 2021-2027 European Union budget. The aforementioned George Soros may have been unhappy about the revisions to fund allocation for his native country of Hungary – among other central and eastern European lands – but the instinct to allocate more funds to countries like Greece, Italy and Spain makes economic and political sense. To build confidence, both reality and money talks, and the European Union is in dire need of a bigger regional redistribution policy, just as other single-currency zones (such as the United States) have. Stage two is the summit. Time to channel some of the underlying emotions captured in the Henry Ford quote above. Macron is certainly intelligent enough to see the challenges – and you would have thought a “legacy mode” Merkel would be having similar thoughts.

Chris Bailey is with Raymond James Euro Equities, an affiliate of Raymond James & Associates, and Raymond James Financial Services. All expressions of opinion reflect the judgment of Raymond James & Associates, Inc., and are subject to change. There is no assurance any of the trends mentioned will continue or that any of the forecasts mentioned will occur. Economic and market conditions are subject to change. Investing involves risk including the possible loss of capital. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets.

Trade War on Hold – At Least for Now

Washington policy analyst Ed Mills discusses the latest trade negotiations between the U.S. and China.

May 21, 2018

In summary: Negotiations between U.S. and Chinese officials in Washington last week wrapped up with a commitment to “substantially reduce” the U.S. trade imbalance with China, specifically by boosting U.S. energy and agricultural exports with a focus on strengthened cooperation on intellectual property protections. The agreement calls for a delay in tariff implementation and could delay the release of the Treasury’s report on restriction on Chinese investments in certain industries and technology. This could be viewed as a double positive in the near term.

Plenty of work remains, and working out specific details will remain a significant challenge. We do continue to believe the final outcome will be a negotiated deal. The turning point to-date in these negotiations appears to have been the Trump administration’s willingness to take actions to block Chinese companies from key U.S. technologies, which could easily be ramped up if trade talks break down.

While this weekend’s headlines were positive, we continue to monitor congressional action on changes to U.S. regulatory approval for foreign investments (generally seen as anti-China), as this could complicate any final deal.

Additional detail provided below.

Agreement in Principle

The joint statement released by the two sides following this week’s negotiations highlights agreement to “substantially reduce” the U.S. trade deficit with China. The administration is targeting a reduction in the annual trade deficit of $200 billion (currently at $335 billion), but the final target has not yet been agreed to by China.

Efforts to boost exports will specifically focus on agricultural and energy resources, with the U.S. possibly moving to secure additional purchases and investment into oil and liquefied natural gas. A commitment from China to boost energy purchases could drive additional energy infrastructure investment, increase China’s longer-term economic dependence on the U.S., and allow the Trump administration to claim a victory in U.S. job creation. Treasury Secretary Steven Mnuchin set an expectation of an increase between 35% and 40% in agricultural exports in 2018 and doubling of energy purchases over the next three to five years.

U.S. officials are expected to travel to Beijing to continue talks and solidify the final details of an agreement.

Intellectual Property

A key focus of the negotiations remains the protection of U.S. intellectual property and the scaling back of forced intellectual property transfers. The official statement moves the two sides closer to agreement on intellectual property protections with China working to modify laws and regulations, although specifics have not yet been put forward.

May 21 marks the deadline for the Treasury’s report on recommendations to limit Chinese investment in critical U.S. technology pursuant to the administration’s Section 301 investigation into China’s harmful intellectual property practices. We are watching to see whether the report is released on condition that the recommendations will not be implemented if a satisfactory deal is reached or if the report is delayed altogether as a goodwill gesture in negotiations.

Congressional Action

Congress is actively working to change the regulatory approval process for foreign investments in U.S. companies, and there has been increased pushback against Trump’s actions related to removing restrictions against Chinese telecommunications company ZTE. Last week, a congressional subcommittee approved an amendment that would prohibit the Commerce Department from removing the restrictions against ZTE. There is almost no chance this provision will become law anytime soon, but we would argue it demonstrates some of the need for both the U.S. and China to conclude these talks sooner rather than later.

The changes being sought to the Committee on Foreign Investments in the United States are clearly targeted at China and are concerned about transfers of critical technology and intellectual property. There have been some tweaks to these efforts lately to placate some business concerns, but Congress is extremely likely to pass this bill by the end of the year. This uncertainty could complicate trade negotiations.

An Open Letter to Arthur Brooks

5/31/2018

Arthur, I heard you’re retiring from AEI after a spectacular run.  Congratulations and best wishes in your future endeavors.  However, in reading an “exit interview” with you, by Tim Alberta of Politico, I stumbled across what I believe to be a very important and dangerous blind spot in your thinking.

With some trepidation, because the interview with Mr. Alberta was relatively short, I would like to summarize your arguments.  The title of the piece was “Americans are Being Held Hostage and Terrorized by the Fringes.”

• You call competition a “moral good” and bemoan a “culture that’s not trying to win [political] competition vigorously and civilly and respectfully, but rather trying to shut down competition…”.  I happen to agree with you on this.  Discourse has become uncivil. 

• You call this “stupid.”  I agree, again, and you add, “It leads to a flaccid set of political parties…you don’t solve problems…you simply build up power structures.  So all politics becomes a rent-seeking mechanism: my tribe, your tribe.” 

• You blame this on the financial crisis of 2008 and cite Reinhart and Rogoff’s book, This Time Is Different, and three German economists who, in early 2017, published a piece in The European Economic Review.  Reinhart and Rogoff argue that economic recoveries in the decade after financial crises are slow.  The German economists argue that these slow or lumpy recoveries have knock-on political effects. 

• You say, “…in the decade after a financial crisis, the knock-on effect over 10 years is not low growth, it’s uneven growth.  The big thing that happens for 10 years is that you have asymmetric economic growth where 80 percent of the income distribution gets none of the rewards of the growth after the recession.”    This creates populism – where people blame “immigrants,” “trading partners,” or “bankers.”   

• You then blame the rise of Trump, on an “unwillingness or inability of mainstream Republicanism to deal with a lot of misery that was going on.  To talk openly about the despair…there’s been a 323 percent increase in drug overdose deaths for men my age…” 

• You say Congress isn’t detached, but, “they don’t know what to do, so they didn’t do anything.”  You then say, “nobody has ever figured out this first decade problem.  Ever… Politicians say, ‘We can solve this; vote for me and I’ll solve it.’  [But] They can’t solve it…they get blamed.” “Nobody knows what to do except wait it out.”  You claim even Milton Friedman in the White House couldn’t have made a V-shaped recovery. 

• You complain of a deficit of happiness, “When people feel like ‘Sh*t, I can’t get ahead,’ that’s when people feel a lot less happy.” “The best single way to get rid of all this unpleasantness right now is economic growth that’s evenly spread throughout the population.”

That’s a pretty straight forward argument.  If you believe financial crises cause lumpy and uneven distribution of growth, if you think Reinhart and Rogoff understand how economies respond to financial crises more fully than Milton Friedman, no wonder you despair.  But this is where you make your fundamental mistake – buying into the Conventional Wisdom narrative about the Panic of 2008.

Like Paul Gigot, Editor of The Wall Street Journal, and Speaker Paul Ryan, I think you have a fatally flawed understanding of the financial crisis of 2008 – what actually caused it, why TARP was such a huge mistake, and how big government growth after the crisis is the real cause of slow growth, despair and political turmoil.  I know you did not specifically mention TARP, but by citing Reinhart and Rogoff you seem to agree that capitalism itself is flawed and government must fix it.

I vigorously disagree with this logic.  I agree with your co-worker at AEI, Peter Wallison, whose book, Hidden In Plain Sight, proves that the government itself created the subprime crisis.  I also believe that the government’s reaction to the crisis, specifically a $3.5 trillion program of quantitative easing by the Federal Reserve and a $700 billion taxpayer funded bailout, not only did not work, but undermined America’s faith in free markets and capitalism.

President Bush said after passing TARP, “I’ve abandoned free market principles to save the free market system.”  This statement obviously makes no sense.  If you believe in free markets, just like if you believe in the Ten Commandments, violating them in order to save them is nonsense.  You either believe in free markets, or you don’t; you either believe in the Ten Commandments, or you don’t.  This is not me becoming an “armchair general” after the war, with perfect 20/20 hindsight.  A crisis is when a belief system is tested.  The Republican leadership in 2008 failed that test.

Compare this to the 1980s.  The financial crisis of the early 1980s was bigger, in dollar terms, than the financial crisis of 2008.  In 1980, the entire Saving & Loan Industry had negative net capital.  On a mark-to-market basis, almost every money center bank was bankrupt due the default of Latin and South American debt.  Oil prices collapsed, taking Penn Square, Continental, and other banks down.  Over-leveraged, agricultural banks failed as farmland and crop prices plummeted.  Yet, the U.S. experienced robust economic growth in the 1980s.  There was no decade of lumpy growth.

The reason is simple, Ronald Reagan cut tax rates and regulation, while holding back non-defense government spending.  The Fed tightened monetary policy.  In other words, the U.S. followed the prescriptions of Milton Friedman and we did get a V-shaped recovery.  Yet, Reinhart and Rogoff ignore the 1980s financial crisis, and Kenneth Rogoff said they did so because economic growth didn’t suffer in the 1980s.  He ignored that financial crisis because it provided evidence counter to his theory.  Not very intellectually honest if you ask me.

Slow growth in the past decade is because government ignored the Reagan-Friedman-Hayek lessons – in fact they did the exact opposite.  During the Panic of 2008, government did TARP, QE, tax hikes, massive new regulation, more spending and new entitlement programs.  That’s why the economy is hurting and there is despair in the land.

I believe TARP was the greatest violation of Republican economic principles since Herbert Hoover put tax hikes, SmootHawley tariffs and new spending and regulation in place during the 1930s.  Those policies did nothing but deepen the Great Depression.  In 2008 and early 2009, the S&P 500 fell an additional 40% after TARP was passed.  TARP did not work.  In addition, it was a direct bail out of banks, not mortgage holders.  With Republicans in charge (Bush, Paulson, Bernanke), the GOP violated free market principles and bailed out the rich bankers on Wall Street.

In other words, even the GOP didn’t have faith in capitalism.  By passing TARP they professed faith in government.  Once faith in capitalism is undermined, especially by Republicans who have been the historical defenders of capitalism and free markets, it creates the very thing you complain about.  If Republican leaders lose faith in free markets, no wonder the public does, too.  There is no more competition of ideas.  Both sides believe in government.

Then people work overtime to build up “power structures,” and “politics becomes a rent-seeking mechanism.”  When you compete on these grounds, it becomes a battle of “fringe politics.”  If one union in Greece gets a 31-hour workweek, all unions want one.  If banks get bailed out, why not homeowners, or students with loans?  If we can’t trust banks, how can we trust insurance companies, so why not socialize healthcare?  The commanding heights of power moves from markets to government – no wonder the DC area is booming, while despair spreads in the hinterlands.

Not only did Republicans sell out free markets, they paved the way for massive government growth.  I understand the difficulties in comparing the two, but isn’t opioid addiction (which you use as evidence of economic despair) similar to the excessive drinking of vodka in Russia?  Despair is caused by big government, which undermines the vibrancy of free markets and destroys the more even distribution of economic opportunity that you yearn for.

The way to fix the U.S. economy, the best way to create “evenly spread” economic growth and end despair is for government to get out of the way.  It takes faith in markets and people, not government. 

There are always problems, but when central authorities try to fix those problems, they often make them worse.  You are enough of a historian to understand that.  Allowing Reinhart and Rogoff to lead you this far down the wrong path creates despair in my heart.

I’d be happy to sit down with you and discuss these issues in greater detail.  If you don’t have time, or an inclination to do that, please read my 2009 book (which I wrote at the depths of the crisis), It’s Not as Bad as You Think.

630.517.7756  •  http://www.ftportfolios.comThis report was prepared by First Trust Advisors L. P., and reflects the current opinion of the authors.  It is based upon sources and data believed to be accurate and reliable.  Opinions and forward looking statements expressed are subject to change without notice.  This information does not constitute a solicitation or an offer to buy or sell any security.

"A Licking?!"

Jeffrey D. Saut, Chief Investment Strategist, (727) 567-2644, Jeffrey.Saut@RaymondJames.com May 31, 2018 Investment Strategy

In my misbegotten youth (1950s) there was a Timex wristwatch commercial featuring pitchman John Cameron Swayze, which went, “It takes a licking and keeps on ticking!” According to Pop History Dig: 

The Timex “torture test” advertising was also used in TV ads, a series made popular by celebrity newscaster John Cameron Swayze who hosted the spots.  A number of these ads also featured sports celebrities who doled out the tough treatment to the watches and/or supplied an endorsing statement.  Swayze also hosted non-celebrity Timex ads in which the watch would be subject to other trials — whether placed in a washing machine or attached to the bow of a speed boat (Timex).

Since the February 9, 2018’s “undercut low” the same can be said of the stock market, “It takes a licking and keeps on ticking.”  For sure, we identified that 2/9/18 “undercut low” and recommended recommitting some of the cash raise in January in anticipation of a February Flop.  Ever since then most of the oneday “wonder declines” have been followed by decent rallies; this week was no exception as Tuesday’s Tumble was followed by Wednesday’s Win!

The cause proxima for this week’s two-day two-step was mainly Italy, with a dose of Spain’s political troubles mixed into the equation.  As Tom Essaye writes in his daily must have “Sevens Report:”

First, for a bit of background, in March, during the last Italian general election, two “anti-establishment” parties, 5-Star Movement and the League, received the highest numbers of votes.  That caused some concern that if the two parties were able to form a functioning government, they might ultimately introduce a Brexit-style referendum to leave the EU.  Over the past few weeks, the League and 5-Star Movement (along with other smaller parties) have come close to reaching an agreement on forming a functioning government, and that raised “Italexit” fears last week.

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Nurturing Moneywise Children

Teach your children to treasure their financial legacy.

May 15, 2018

Most parents appreciate the importance of traditional education in their child’s development considering the obvious intellectual and social benefits. Yet all too many forget that a financial education is also crucial for ensuring their offspring’s long-term well-being. 

The good news is it’s never too early or too late to begin sharing your financial wisdom and experiences with your family. By taking the time to teach your children the value of money, you’ll have the comfort of knowing they’ll understand how to care for their own financial legacy when the time comes.

An Essential Skill

Like reading, financial literacy is an essential skill, but unfortunately, it’s not typically taught in school. Rather, it’s up to parents to pass on their financial knowledge to ensure the next generation is capable of taking care of the wealth they’ve built.

Pre-kindergarten age is a great time to introduce the basics, including the idea that you must work to earn money in order to pay for items and services, as well as the value of different coins and bills. As they get a little older, your child can start doing chores and earning an allowance. Help them go through the motions of saving up for something they’d like to buy and deciding whether or not it’s a worthwhile purchase.

With pre-teens and teenagers, there are several other steps you can take, such as helping them open a savings account with their earnings from chores, babysitting or other jobs. Share your own tips on managing a budget and introduce them to the concept of investing and saving for retirement. Simply being transparent with your children about the realities and costs of living can go a long way in preparing them for the future.

Sharing Your Financial Legacy

While products such as trusts and wills can help ensure your wishes are carried out, they can’t give your heirs the true understanding of how to save, grow and spend money wisely. In fact, if your children are going to receive a sizable inheritance, they may get overwhelmed by sudden wealth without a solid foundation to rely on. It’s also a good idea to introduce your children, when they’re ready, to your financial advisor and other professional partners, so they’ll know where to find expert guidance when dealing with money issues.

Next Steps

• Write out a sample budget with your children, explaining the expenses you have each month, such as utilities and groceries
• Help them open a savings or checking account
• Schedule a time for them to join you for a meeting with your financial advisor

Student debt just hit $1.5 trillion

America’s student loan problem just surpassed a depressing milestone.

Outstanding student debt reached $1.521 trillion in the first quarter of 2018, according to the Federal Reserve, hitting $1.5 trillion for the first time. Though the marker is somewhat arbitrary, it offers a reminder of how quickly student debt has grown—jumping from about $600 billion 10 years ago to more than $1.5 trillion today—and that the factors fueling the increase aren’t likely to disappear any time soon.

“People pay attention to milestones,” said Mark Kantrowitz, a financial aid expert. When student debt surpassed $1 trillion in 2012, “it definitely caused a shift in coverage of student loans in the news media,” he said. In theory, that helps raise awareness of the issue for student advocates, lawmakers and, in particular, borrowers when considering what college to attend. But Kantrowitz added, “What’s more important is the impact on individual borrowers.”

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Morning Tack: "Breakouts Everywhere"

Jeffrey D. Saut, Chief Investment Strategist, (727) 567-2644, Jeffrey.Saut@RaymondJames.com

May 10, 2018

Investment Strategy

“Breakouts Everywhere” You’ve probably seen the cartoon where a woman comes home and finds her husband in with another woman?  The man looks up and says “No, I’m not cheating!” and follows that up with his favorite Groucho Marx line, “Who are you going to believe?  Me or your own eyes? (Groucho).”  We could say the same thing about investors over the past two weeks, “Who are you going to believe?  Me or your own eyes?” because there are upside breakouts everywhere in the stock charts.  We have been talking/writing about this for a few weeks and our pal Bob Pisani did a particularly good job of showing some breakouts right before our appearance on CNBC.  Shortly thereafter Bob wrote this:

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Trust in Your Business's Future

As you plan for the future of your business, tools and strategies exist to help ease the impact of taxes.

May 8, 2018

An estimated $30 billion to $40 billion in wealth is set to transfer from baby boomers to their heirs or favorite charities. This includes wealth tied up in a family business. As you plan for the future of your business, you may earmark the proceeds from the sale of the business to support your lifestyle, your family or a preferred charity for years to come. But it’s also important to consider the potentially significant toll taxes could take. Fortunately, tools and strategies exist to help ease the impact.

One such tool is a trust – a fiduciary relationship in which you as the grantor give a trustee the right to hold title to assets for the benefit of your beneficiary. While there are many types of trusts, here are four that are commonly used in business planning.

Grantor Retained Annuity Trust (GRAT)

This irrevocable trust enables you to enjoy the proceeds from the sale of your business, then potentially pass significant wealth to beneficiaries with little or no gift tax. To create a GRAT, the grantor transfers assets into the trust and receives annuity payments over a fixed number of years. These annuity payments are calculated so that the grantor is treated as having made little or no taxable gift to the GRAT beneficiaries because, relative to present value, the grantor will receive back everything put in. Appreciation in the trust assets in excess of the IRS assumed rate of return eventually passes to the benefi­ciaries gift-tax free.

For a GRAT to be effective, two conditions must be met: First, the assets in the GRAT must grow faster than the IRS’s assumed rate of return so there is something to pass along. Second, you must outlive the term of the GRAT. If not, assets will revert back to your estate. However, creating a series of short-term GRATs can mitigate some of the mortality risk.

In some cases, the IRS has held that trusts established after signing letters of intent violated the Anticipatory Assignment of Income Doctrine that was adjudicated by the Supreme Court in 1930 to limit tax evasion. Consult your tax, legal and financial professionals regarding the date you intend to sell your business and any estate planning or wealth transfer you wish to do around the sale.

Intentionally Defective Grantor Trust (IDGT)

An IDGT creates a complete transfer of assets to a trust for transfer-tax purposes, but an incomplete (defective) transfer for income tax purposes. Assets, such as a business, are transferred by a completed gift or a fair market value sale (or installment sale), in which both are disregarded for income tax purposes in regard to the estate.

As a result, you will no longer retain any powers that would cause estate tax inclusion, and the future value of the transferred assets is removed from your estate. Although the trust is irrevocable, it is treated as a grantor trust for income tax purposes because the grantor retains other powers. This means the grantor, though not a beneficiary, is taxed on all the trust’s income, even though you would not be entitled to any trust distributions.

Incomplete-Gift Non-Grantor Trust (ING Trust)

Some states’ income taxes can reach significant percentage levels. This is where the establishment of an ING trust may help. To date, ING trusts have been used for nearly 20 years and have received more than 70 private letter rulings from the IRS that the trust structure is valid.

The trust is effective due to its designation as a taxpayer for income tax purposes. Therefore, the trust and trustee must be domiciled in a no-income-tax state. When business ownership is transferred to the ING trust, the transfer is not a taxable event. When the trust later sells the company, the income will be attributed to the trust, a resident of a no-income-tax state. While the proceeds and earned investment income remain in the trust, they will receive the benefits of tax savings. When the trust is requested to distribute funds, income tax is then paid to the home state.

Charitable Remainder Trust (CRT)

If you would like the proceeds of selling a business to benefit a favorite charity, yet also desire to receive income from the pro­ceeds, a CRT is an option. It is, however, an irrevocable trust so once established, terms cannot be changed nor assets moved.

To establish a CRT, you would transfer business shares or proceeds from a sale to the trust. You would name yourself or another beneficiary as recipient of the income from the trust. When the terms of the trust end, the chosen nonprofit group receives the remainder. You also will receive an income tax deduction equal to the estimated present value of the remainder interest. The charity selected must be approved tax exempt by the Internal Revenue Service. The trustee is also required to maintain tax records.

A trust in the future of your business may invigorate your trust in the future, too. Just be sure to consult with professionals to determine what works best for your personal and professional situation.

This article is general in nature and provided for informational purposes only. Raymond James and your Raymond James financial advisor do not provide tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Caregiver Connections

Caregiver Connections

Whether in-person or online, connections fostered among caregivers provide long-range benefits.

May 9, 2018

As the population of our country ages, the face of caregiving is changing along with it. Today, 80% of those providing long-term care in the United States are not healthcare professionals – instead, they are family members and even friends. There are 40.4 million unpaid caregivers of adults ages 65 and older in the United States. Most help one aging loved one, but 22% help two, and an impressive, but likely overwhelmed, 7% help three or more.*

There are 40.4 million unpaid  caregivers of adults ages 65  and older in the United States.

With this shift from the clinical to the familial comes another change: A majority of those same individuals do not self-identify as “caregivers,” despite providing assistance to loved ones on a regular basis. This may not seem like a problem, until you consider that caregivers who don’t truly understand their role are less likely to connect with those around them for support and encouragement.

A Caring Community

Fostering connections with those who understand what you’re going through can make the road you’re traveling easier to navigate. By standing together, caregivers create a community through shared experience that’s widespread and accessible anywhere, both in their local area and through online platforms.

Many caregivers enjoy participating in community events, attending support groups or gathering over brimming cups of coffee. Group text messages are easy to create and maintain, and provide a safe space to exchange well wishes, best practices, uplifting messages and more. Scheduling regular get-togethers with nearby caregivers is another way to connect, providing an outlet as well as a wealth of resources.

Tap Into Your Virtual Network

An internet connection can also play an important role in your caregiving experience, cluing you in to new advances in medicine and technology. Not only that, but a majority of caregivers who have accessed online information say that it has helped them cope with stress.

When venturing into online spaces, search out message boards with discussions that reflect your own experiences, pencil in video chat dates with faraway friends, and read up on all the internet has to offer – from in-depth research to lighthearted blog posts. There’s no limit to what you can find.

Connect and Reflect

As a caregiver, you’re part of a community of empowered individuals who give of themselves to better the lives of those they love. And since we’re on the topic of connections, it’s important not to forget the greatest connection that can be strengthened during your time as a caregiver: the one you share and are fostering each day with your loved one.

Next Steps

• Connect with someone who can relate to your caregiving experience.
• Explore a message board for added caregiving insight.
• Have a conversation with your advisor about the financial implications of caregiving.

 Sources: bls.gov, pewinternet.org; *Pew Research Center                

A Brighter Financial Future

Consider talking to your kids or grandkids sooner, rather than later, about basic financial management.

May 1, 2018

A recent Money Matters on Campus survey revealed that more than 40% of new college students didn’t feel prepared to manage their money. Some were reluctant to even check their bank accounts for fear of what they might find. Clearly, some advice would be helpful.

Over 40% of new college students don’t feel prepared to manage their money.

Consider talking to your kids or grandkids sooner, rather than later, about basic financial management. These skills are much easier to learn before they become financially independent, as there are fewer financial factors to consider. Teaching them a few basic principles now will leave them better equipped to deal with more complicated matters down the road, such as mortgages, healthcare and tradeoffs that may need to be made in retirement.

Start with these five basics.

1. Determining how much money they have

Although most college students are more likely to consult an app than an actual paper bank statement, it’s essential that they understand what they’re looking at. Explain any unfamiliar terms, such as “posted” vs. “available” balance. This way, they’ll know exactly how much cash they have on hand.

2. Understanding credit and loan offers

College students are easy prey for predatory lending practices. Teach yours to recognize the differences between good offers and bad ones. While it’s important to establish a credit history, it’s even more important to understand how credit works and how to use it responsibly.

3. Distinguishing between wants and needs

Building a solid financial foundation requires understanding the difference between wants and needs. Since most young adults have had their needs taken care of by their parents, they’re used to spending their own money on wants. As they grow older, it’s crucial they learn to put needs before wants.

4. Establishing a simple budget

The sooner young adults learn to budget, the easier it will be to grasp the basic skills. Teach them the importance of developing a plan for their income, and how to prioritize. Perhaps help them build a spreadsheet or set up an app to track and categorize their expenses.

5. Thinking about tomorrow

Teach your kids to think beyond today, and encourage them to save for themselves, the future and others. It’s never too soon to save for retirement and to start thinking philanthropically. And everyone can use a rainy day fund to help get them through the unexpected.

Next Steps

• Make sure your kids have mastered financial basics by checking in with them from time to time
• Follow up on any new questions that may have surfaced after their initial money management attempts
• Help them quickly recognize when they need financial help, and where to turn for solutions

Source: Moneymanagement.org

Debunking Social Security Myths [INFOGRAPHIC]

Shine some light on these common misconceptions to help get the most from your hard-earned benefits.

April 24, 2018

Should you always file for Social Security as late as possible? Not necessarily. Read more about some common misconceptions:

Social Security Myths and Misconceptions

What you don't know about Social Security and what you can do about it.

April 24, 2018

There’s no doubt about it. Filing for Social Security can be daunting. There’s a ton of information – and misinformation – to weed through, as well as the need for some calculations based on several variables. Your benefits depend on your age, how long you’ve worked, what you earned, your marital status and number of dependents. Seems like you have to factor in everything but your IQ. So to help, we offer some common misconceptions as well as some guidance on ways to get the most from your hardearned retirement benefits.

Myth No. 1: Social Security won't be around when I need it.
While it’s true that your contributions go to current beneficiaries as opposed to an account reserved for you, Social Security continues to be replenished by younger, working Americans, as well as earned interest on its bond portfolio and income tax on benefits paid to higher-income retirees. However, the trustees have projected that any existing surplus could be depleted sometime between 2033 and 2037, if no further legislative action is taken. This could mean that future retirees may be paid some portion, between 75% and 80% for example, of the benefits promised, but not zero like many fear.

Myth No. 2: Social Security is all you need.
Somewhat paradoxically in light of Myth No. 1, more than half of Americans expect to fund their retirement entirely with Social Security. While benefits do get adjusted for cost of living increases, they were always intended to supplement, not replace, retirement savings. Retirees received an average of $1,404 in benefits for the month of December. Even if you live frugally, that amount likely will not be enough to account for all the variables you might encounter over a decades-long retirement. That’s why it’s important to do what you can to maximize all your retirement savings for as long as possible (think taking full advantage of your employer’s 401(k) match).

Myth No. 3: File as early as possible.
No one quite knows how long you’ll live past full retirement age (FRA), so some think you should collect as soon as you’re eligible. But that means permanently reducing benefits when the odds favor a longer lifespan for most of us. Your advisor can help you calculate your breakeven point based on your statistical life expectancy and your family history. Higher earning spouses, in particular, may want to delay as long as possible, not just to maximize their own benefits, but to ensure a higher payout for their widow or widower when the time comes. Surviving spouses are eligible for 100% of their spouse’s benefit.

Myth No. 4: File as late as possible.
We’re not trying to confuse you. For the vast majority of applicants, waiting past full retirement age to file makes the most sense financially. But there are conditions that warrant filing early, particularly if you need the extra income or if your health isn’t the best. On the other hand, retirees who want to have the most income during their prime years may want to file early, too. Should you change your mind, you can claim a do-over within the first year, but you have to pay back what you received. If longer than a year, you can voluntarily suspend your benefits at FRA and then earn delayed credits until age 70.

Myth No. 5: You'll lose benefits if you continue to work after filing a claim.
If you file before your normal retirement age and continue to work, your benefits will be temporarily reduced depending on how much you earn. But those benefits are merely delayed until full retirement age (FRA), not lost forever. Once you reach FRA, you’ll receive increased monthly payments to make up the difference. Plus, you may end up increasing your annual benefit because Social Security is based on your 35 highest years of income. 

Myth No. 6: You're out of luck if you've never worked outside the home.
It’s true that regular benefits are based on an employment record of at least 40 quarters. But those who haven’t worked for that long, or at all, can receive half of what a spouse or even an ex-spouse would receive (as long as you were married for at least 10 years and haven’t remarried). If you’re a surviving spouse, you may be eligible for full benefits on your spouse’s record. Even ex-spouses can claim full survivor benefits as long as you were married for more than 10 years and never remarried before he or she passed away. Of note: remarriage after age 60 does not prevent or stop entitlement to benefits for survivors – even ex-spouse survivors.

Myth No. 7: Follow advice from friends and family.
Filing for Social Security based entirely on advice from nonprofessionals may work just fine, but it may not help you maximize benefits, which could leave thousands of dollars at stake. Often a consultation with your financial advisor and an accountant can help determine the best strategy.

Sources: ssa.gov; investopedia.com; forbes.com; thefiscaltimes.com; marketwatch.com; cnnmoney.com

Thoughts on Trade

Brian S. Wesbury – Chief Economist

Robert Stein, CFA – Dep. Chief Economist

Strider Elass – Senior Economist

   When the report on international trade came out earlier this month, protectionists were up in arms.  Through February, the US’ merchandise (goods only, not services) trade deficit with the rest of the world was the largest for any two-month period on record.  “Economic nationalists” from both sides of the political aisle, think this situation is unsustainable.

   Meanwhile, some investors ran for the hills when President Trump started announcing tariffs on steel, aluminum, and other goods, thinking this was the reincarnation of the Smoot-Hawley tariffs that were a key ingredient of the Great Depression.

   We think the hyperventilating on both sides needs to stop. In general, nothing is wrong with running a trade deficit.  Many states run large and persistent trade imbalances with other states and, rightly, no one cares.  We, the authors, run persistent trade deficits with Chipotle and Chick-fil-A, and we’re confident these deficits are never going away.

    Running a trade deficit means the US gets to buy more than it produces.  In turn, we have this ability because investors from around the world think the US is a good place to put their savings, leading to a net capital inflow that offsets our trade deficit.  Notably, foreign investors are willing to invest here even when the assets they buy generate a low rate of return.  As a result, this process can continue indefinitely.

   It’s important to recognize that free trade enhances our standard of living even if other countries don’t practice free trade.  Let’s say China invents a cure for cancer and America invents a cure for Alzheimer’s.  If China refuses to give their people access to our cure, are we better off letting our people die of cancer?  Of course not!

Imposing or raising tariffs broadly would not help the US economy.  Nor would imposing tariffs on specific goods, like steel or aluminum.Giving some industries special favors will
only create demand for more special favors from others. It’ll grow the swamp, not drain it.

   All that said, we understand the frustration policymakers have with China, in particular, which has been levering access to its huge market to essentially steal foreign companies’ trade secrets and intellectual property.  It has a long-term track record of not respecting patents or trademarks.

    In theory, letting China into the World Trade Organization was supposed to stop this behavior.  But no company wants to bring a WTO case against China when it thinks China would respond by ending its access to their markets and letting in competitors who are more willing to be exploited.

    In addition – and this is very important – China is unlike any of our other trading partners in that it is a potential major military rival in the future.  There is a national security case to be made - even if one takes a libertarian position on free trade in general - that the US could accept a slightly lower standard of living by limiting trade with China, if the result is a lower standard of living for China as well.

   And China doesn’t have much room to fire back at recent US proposals (none of the tariffs targeted specifically at China have been implemented, by the way).  Last year, China exported $506 billion in goods to the US, while we only sent them $130 billion.

   That gives our policymakers room to raise tariffs on China much more than they can raise them on us.  If so, China would generate fewer earnings to turn into purchases of US Treasury debt.  Yet another reason for fear among bond investors.  However, don’t expect China to outright dump Treasury securities in any large amount.  They own our debt because it helps them back up their currency, not as a favor to the US.

   We’re certainly not advocating a trade war.  But an approach that focuses narrowly on China’s abusive behavior could pay dividends if it moves the world toward freer trade.    

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$15 Account Fee Credit for Going Paperless

April 16, 2018

Dear Client & Friends,

When you choose to go paperless and stop receiving your Raymond James statements, trade confirmations and account communications by mail, you’ll be doing more than just reducing clutter and saving trees – you can also save money. Beginning May 2018, you can get a $15 account fee credit when you choose online document delivery for accounts subject to any of the following:

·         Annual Account Maintenance Fee (charged annually in August)

·         Capital Access Fee (waived the first year, then charged annually on the account opening anniversary month)

·         Retirement Account Fee (charged annually on the account opening anniversary month)

How to get the credit

If your account is subject to one of the fees above, it can be eligible for the credit if it meets the following criteria:

·         You maintain online delivery for all account documents.

·         The account contains a minimum of $5,000 in cash or securities on its billing date.

·         At least $600 in deposits have been made in the account in the 12 months before the billing date.

How to elect paperless delivery

To elect paperless delivery of all documents, log in to Investor Access, visit the Account Services tab and select “Online viewing only” as the document delivery option for the account.

·         If you do not have an Investor Access login, visit raymondjames.com/investoraccess and click “Enroll in Investor Access” or contact me for assistance.

·         Note: If your account meets the criteria and you have already elected paperless delivery of your account documents, you will automatically receive this credit provided you maintain eligibility as outlined above.

Additional information

·         You can receive multiple $15 credits (one per account) if you elect paperless delivery on more than one eligible account.

·         Credit(s) will automatically renew and be applied annually if you continue to maintain eligibility.

·         It is important that you regularly check your document delivery email address in Investor Access to ensure it is current, valid and spelled correctly.

·         For your protection, Raymond James will reset your document delivery elections to all paper if you do not log in to Investor Access for more than six months, or if notifications sent to your email address are returned undeliverable more than once within 30 days. If the account is reset to paper delivery, you will not receive the credit.

·         This program does not apply to accounts already receiving fee waivers.

Just imagine – no more paperwork piling up or documents getting lost. Going paperless will mean better organization, greater security and saving money. And if you find that you need something on paper, just print it on demand.

Thank you, as always, for being a valued client. If you have any questions or would like to discuss this in more detail, please do not hesitate to give me a call.

Sincerely,

Matt Goodrich                                                  Larry Goodrich, CFP

President, Goodrich & Associates, LLC.         Vice President, Goodrich & Associates, Inc.

Branch Manager, RJFS                                      Branch Manager, RJFS                        

Raymond James Financial Services does not accept orders and/or instructions regarding your account by e-mail, voice mail, fax or any alternate method. Transactional details do not supersede normal trade confirmations or statements. E-mail sent through the Internet is not secure or confidential. Raymond James Financial Services reserves the right to monitor all e-mail.

Any information provided in this e-mail has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Raymond James Financial Services and its employees may own option, rights or warrants to purchase any of the securities mentioned in this email. This e-mail is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer.

The Art of Giving

Thinking about donating your beloved collection of cars, art, antiques or jewelry? Keep these considerations in mind.

April 10, 2018

When it comes to giving generously, cash doesn’t have to be king. You can donate time, money, stocks, even property like your art or car collection. But why give away a collection you’ve built and enjoyed over the years? In some cases, your heirs may not be as passionate about your passion investments or hesitate to take on the upkeep of a sizeable collection. So you may consider donating the property instead of bequeathing it. The good news is that, in many cases, donating tangible property allows you to enjoy a tax deduction as well as the feeling of sharing something you love with others.

Of course, there are some IRS rules to consider, so it’s a good idea to talk to both your tax professional and financial advisor – as well as your designated charity and an appraiser – before donating your collection of art, antiques, collectibles, jewelry, vehicles or other tangible property.

Keep in mind, though, that collectibles generally come with ongoing expenses – for storage, insurance and maintenance. So, before you crate up the Van Goghs, consider:

Whether They Want It

Your family doesn’t want the collection, but who does? Current tax laws favor donations to public organizations that can make use of the items (e.g., art to museums and rare books to a university library). It’s called related use.

In order to maximize your charitable deduction benefits, the qualified organization must also be a public charitable organization. If you donate to a private foundation, you’ll likely be limited to deducting your cost basis rather than full fair market value, which may have increased since you purchased the pieces. Gifts to charity or donor advised funds for non-related use are deductible at the lesser of the cost basis or fair market value.

Before you wheel over your car collection, find out what kind of property your chosen charity is willing to accept and under what conditions. Museums may not be interested in the upkeep, storage and maintenance of vintage vehicles, for example. And they may only want the most important items in your collection. This may be a time to set aside your ego, look at your collection critically and decide if selling some of the lesser works might be better used to fund an endowment to preserve the remaining pieces for generations to come.

Whether You Can Relinquish Control

Think how hard it is to relinquish your favorite comfy chair to charity. It only gets harder when the items have considerable monetary value, too. You may be inclined to put some restrictions on how the property can be used (whether it must hang in the permanent collection or be included in the catalogue) or impose conditions on its future sale. However, retaining too much control could mean the transaction will no longer be considered a gift for tax purposes, or that the recipient may need court approval to change the terms of the agreement after you pass away. An unrestricted gift agreement between you and the donee is essential if your intention is to truly benefit the recipient.

Whether the Gift Is Worth What You Think

Valuations can be disputed, so get an independent, qualified appraisal for anything that may be worth more than $5,000. If the item’s value is less, there are several online sources to help you determine fair market value for your donated goods. Don’t forget to get a written receipt acknowledging the donation and its value. And if you’re donating something worth more than $50,000, ask the IRS for a Statement of Value before claiming it on your tax return.

Source: thetaxadvisor.com; artbusiness.com; Planned Giving Design Center

Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While familiar with the tax provisions of the issues presented herein, Raymond James Financial Advisors are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.

March's Market Noise Continues

Despite the market noise, a healthy backdrop exists for the U.S. equity markets and economy.

April 2, 2018

The market volatility we saw in early February persisted through March – and has now continued into the start of April. Since the S&P 500 peaked on January 26, the index moved at least 1% on a daily basis on half of the 43 trading days through the end of March.

“This contrasts to only one move of greater than 1% during 2018 prior to that peak and is a far cry from the calm seen in 2017, when the S&P 500 produced a 32-year volatility low with only eight days with moves of at least 1% for the full year,” shared Managing Director of Equity Portfolio & Technical Strategy Michael Gibbs.

However, a healthy backdrop for the U.S. equity markets exists amid all the recent market noise – and U.S. economic conditions remain quite healthy. In a recent Federal Open Market Committee (FOMC) press release, the Fed highlighted strengthening of their economic outlook. Growth in the remainder of the year is expected to be relatively strong, with an unclear impact from fiscal stimulus such as corporate tax cuts and increased spending.

Having raised short-term interest rates again on March 21, Fed officials are split in their expectations of whether there will be two or three more hikes this year. “Since December of 2015, including this month’s hike, the FOMC has raised rates six times for a total increase of 1.75%. Over the same time frame, the 10-year Treasury has risen only 0.55%, and we saw the Treasury yield curve flatten during the month,” explained Doug Drabik, senior vice president, Fixed Income Services Group.

The Fed expects inflation to drift gradually higher, while the unemployment rate is anticipated to fall to nearly a full percentage point below what it considers a long-term sustainable level in 2019 and 2020. However, the risks of a monetary policy error are increasing.

While well-intentioned, tariffs raise input costs, invite retaliatory tariffs on U.S. exports, disrupt supply chains and increase global investment uncertainty. “The bigger concern has been the reaction of our trading partners, which, to date, has been muted – giving rise to the hope the worst-case fears about a trade war are more likely not going to be realized,” according to Washington Policy Analyst Ed Mills. The financial markets have responded to a one-step back, one-step forward set of trade policy decisions.

"To read more please follow the link below"

http://www.raymondjames.com/pointofview/marchs-market-noise-continues?utm_source=hearsay&utm_medium=social&utm_campaign=market%20updates

Ignoring the Invisible Hand

Brian S. Wesbury – Chief Economist

Robert Stein, CFA – Dep. Chief Economist

Strider Elass – Senior Economist

     One of the most important questions we have about our country’s future is whether prosperity itself will make the American people lose sight of where that prosperity comes from; whether we’ll forget to cultivate the attitudes about freedom, property rights, and hard work that have made not only us great but also all the other places that have followed the same path.

     To be clear, this has nothing directly to do with who is president or which party controls Congress.  It has nothing to do with the tax cut passed late last year, or recent tariffs, or increases in federal spending, or red tape being cut or added.  Instead, it runs much deeper than that and will affect all of these issues over the very long term, multiple generations into the future. 

     The issue comes to mind for personal reasons, as a couple of us travel around the country with our high school juniors looking at colleges, hither and yon.

      We’re not here to shame any particular school, so we’re not going to name any.  But here’s what we notice on our visits:  at some point, the college admissions officers in charge of the meeting will talk about great accomplishments by students or recently-graduated alumni.  Invariably, the accomplishments are volunteer efforts of various sorts that help people in some far off land or, sometimes, here in the US.

      Don’t get us wrong, stories like this deserve to be told.  They’re important and worthy of honor.  But, not once, in all our collective college tours have we ever heard a school bring up someone who, say, grew up in tough circumstances, was maybe the first in their family to go to college, and has since gone on to become a very successful entrepreneur, investor, or key officer at a large company, like a CEO or CFO,…someone who has gone on to create wealth for their own family and others as well. 

     Not once. 

     Which is odd because we know these colleges must have tons of these stories to tell.  You can tell when you’re taking the tour after the admissions sessions when you walk through the campuses and see the dorms, classrooms, and athletic centers many of which are named after alumni who’ve cut enormous checks.

     Maybe stories of business-oriented success are just not on the radar of the kinds of people who run admissions offices.  Or, worse, maybe they think it’s embarrassing or that there should be some sort of shame associated with striving to generate wealth.  

     Either way, they seem out of touch with why so many of their students want to go to college in the first place.  “Making the world a better place” is not just about volunteer work; it’s about personal ambition and desire mixing with the invisible hand to raise the standard of living for everyone.         

     Capitalism isn’t a dirty word and the long-term success of our civilization means making sure our children know it.

"To read more please follow the link below"

https://www.ftportfolios.com/Commentary/EconomicResearch/2018/4/2/ignoring-the-invisible-hand