In This Issue
Welcome to MONTH-2-MONTH, an e-Newsletter from Alexander Financial Planning, Inc. MONTH-2-MONTH is intended to provide you with updates on AFP and timely financial planning and investment information on a variety of topics. You are welcome to forward this e-mail on to others.


Rain, Rain, Stay Away

We may be begging for rain later this summer, but we sure have had our fill of it for the month of June! We hope you have been able to dodge the rain drops and have not incurred any significant damage due to the degree of rain we have experienced this month. There have been some very pleasant days with low humidity and we hope you have been able to get out and enjoy them!

As we round the mid-point of this year, we hope you have a safe and enjoyable Fourth of July next week.


Save the Date 

We are planning our next client event for Thursday, September 26 at 7 pm. The program is entitled, "Investing in the Current Economic Environment" and our speaker is Matt Lord with JP Morgan. It will be held at the Open Door in Grandview Heights and it will be followed by a tour and tasting at High Bank Distillery. Look for more details as the date approaches. 

New Hire

We are very excited to announce that we have hired Maria Simmonds as our Project Specialist! She has been an intern at AFP periodically over the last 2 years and she is excited to enter the world of personal financial planning. Maria graduated from Ohio Dominican in May with a degree in Finance and Economics. She is currently working towards a Master's in Business Administration at Ohio Dominican as well. She is on track to complete this in May of 2020. We are delighted to have her join our firm and we look forward to introducing her to you.

On a Personal Note:
Teri's World -  I think Teri brought the rain from Italy in May back to the U.S. with her! She has been spending time this month weeding her vegetable garden, taking care of things around the house and working on projects in the office. She has stepped up her running and working out this month, took her older daughter and son-in-law to the musical "Finding Neverland" and saw Kool & the Gang (Picnic with the Pops) with friends at the Commons. Teri is captain of one of the houses that will be on the Grandview Hts. Marble Cliff Historical House tour that will take place October 6th. She has been working with the home owners this month to get ready for this event. The ticket pick-up location for the day of the tour will be our parking lot. She is also on the Grandview Hts. Traffic Committee and the June meeting was related to traffic concerns in Grandview along with proposed road changes due to the Grandview Hts. schools renovation project.

Wh at a bou t Bob? - Bob & Christine had an absolutely incredible pilgrimage to Italy. They flew into Rome and spent 3 days there. They renewed their wedding vows on their 24th anniversary while in Rome. They then went on to Lanciano on the eastern coast. Then south to San Giovanni Rotondo, back north to Assisi for two nights. From Assisi they went to Siena and spent a day there. Then on to Florence, they stopped for wine tasting at a family vineyard that dates back to the 15th century. From Florence they headed north to their final stop in Venice. The Basilicas, history, countryside, food and people were just amazing. It was everything they thought it would be and more. Oh yea, the wine!!! Certainly can't forget about that!

Tracey's Time - Tracey was busy  getting things done in the office and at home  the first week of June to prepare for her 3 week vacation. She has been exploring the Southwest in her RV for the last 3 weeks with her husband and daughter. She will be returning to the office July 1st. Can't wait to hear of her adventures!

Maria's MomentsMaria's June has been a month of extreme highs and lows, with the birth of her nephew Augustine Peter and the passing of her grandfather. Her parents celebrated 31 years of marriage this past month and Augustine was baptized on June 13th, the day Maria's grandparents were married 60 years before. Maria is excited to start a new chapter as she begins her career at Alexander Financial Planning.

(Current Economic and Investment Information)

  • BOND MARKET - The US Bond market (including treasury, municipal, corporate, mortgage and asset-backed debt) was worth $43.1 trillion as of 3/31/19. Treasury debt ($15.9 trillion) makes up the largest piece of the US bond market (source: Securities Industry and Financial Markets Association).
  • STOCK MARKET - The total capitalization of the US stock market was &31.1 trillion as of 3/31/19, or 72% of the size of the US bond market as of the same date (source: Wilshire). 
  • JOBS & THE ECONOMY - The last recession in the USA began at the end of December 2007 and lasted 18 months through June 2009. The nations unemployment rates of 12/31/07 was 5.00%, climbing to 9.5% as of 6/30/09 (source: National Bureau of Economic Research, Department of Labor).
  • US BUDGET - During the first 8 months of fiscal year 2019, i.e., through 5/31/19, tax receipts are up +2/3% from the previous year to $2.27 trillion while outlays are up +9.3% to $3.01 trillion (source: Treasury Department).
  • FEDERAL RESERVE - The probability of a Fed rate cut as of the end of last week (Friday 6/14/19) at its meeting scheduled for 6/19/19 was 23%. The probability of a Fed rate cut at its 7/31/19 meeting was 87%. The probability of a Red rate cut at its 9/18/19 meeting was 97% (source: CME Group).
  • HOUSING - Banks repossessed 10,634 homes nationwide in May 2019. Banks repossessed 93,777 homes in May 2010, the 2nd worst month ever in American history (source: ATTOM Data Solutions).
  • OPEC OIL - The 15 nations that make up OPEC produced 29.9 millions barrels of crude oil per day in May 2019, the cartel's lowest monthly production in more than 5 years and 2.6 millions barrels a day below the 32.5 million barrels a day produced just 7 months earlier in October 2018 (source: Rystad Energy).
  • US OIL - US field production of crude oil reached 12.4 million barrels a day for the week ending 5/31/19, the largest weekly total reported in the 99 years this statistic has been tracked (source: Department of Energy).

  • U.S. INTEREST RATES - As of 12/17/18, 10 Wall Street strategists predicted where the yield on the 10-year Treasury note would be as of 12/31/19, i.e., a year down the road. All 10 individuals foretasted an increase in the 10-year note yield during the year from actual 12/31/18 yield close of 2.68%, with the predictions ranging from a low of 2.75% to a high of 3.6%. instead of rising however, the rate has fallen YTD in 2019 as the yield on the 10-year note closed at 2.06% last Friday 6/21/19 (source: Barron's). 

  • GERMAN INTEREST RATES - The yield on the 10-year German government bond fell to a record low -0.32% on 6/18/19, i.e., a new buyer of that bond is guaranteed to take a loss if he/she holds that bond to maturity (source: Financial Times). 

  • CHINA'S OWNERSHIP OF U.S. DEBT - China's ownership of Treasury securities peaked at $1.20 trillion in August 2017 but has dropped 7.4% to $1.11 Trillion as of April 2019 (source: Treasury Department).

  • FEDERAL RESERVE - The Fed's 4th meeting of 2019 ended last Wednesday with no change in short-term interest rates. The Fed last cut interest rates on 12/16/08 or 10.5 years ago (source:Federal Reserve). 

  • MORTGAGE RATES - The Average nationwide interest rate on a 30-year fixed mortgage was 3.84% last week, just over 1/2 of 1% above its all-time low of 3.31% achieved at Thanksgiving 2012 (source: Freddie Mac). 

  • RETIREMENT INCOME - The average 65-year old American Male has accumulated retirement savings that will sustain him in retirement for 9.7 years, i.e., to just short of his 75th birthday. The problem: the average 64 year old American male has a life expectancy to 83 years, or 8.3 years beyond the point when his savings run out. This study assumed that male retirees would need retirement income of 70% of the individual's pre-retirement pay (source: World Economic Forum).

  • 2018 U.S. TAX RETURNS - An estimated 18 million taxpayers completed Schedule A ("Itemized Deductions") as part of their 2018 tax return, down 61% in just 1 year (from 46.5 million itemizes in 2017). The reduction in the use of Schedule A was largely a function of the increased standard deduction created by the"Tax Cuts and Jobs Act of 2017" (source: Joint Committee on Taxation). 

  • US DEMOGRAPHICS - By the year 2035, the number of Americans at least age 65 (projected to be 78.0 million) will exceed the number of Americans under the age of 18 (projected to be 76.4 million), for the first time in our nation's history that has occurred (source: Census Bureau).



Data Protection Protocols

Our personal information has never been so easy to steal. And mostly we have ourselves to blame.

Come again? Companies and consumers have been warned against sending out sensitive information as email attachments. And yet many companies still send out credit card forms and signature details. Medical offices use email for their patient communication. People accept and return emails with attachments that contain everything from their financial balances to their medical history. After all, the message is directed only to the recipient, so what can go wrong?

Emails are particularly vulnerable to cyber theft because they are stored in a variety of places, including, of course, the sender's and receiver's device. If someone hacks into your computer, your email is just sitting there for them to read. Rifling through email is now the most common process of malware, and malware is everywhere. The other points of possible attack are your Internet Service Provider and the sender's or recipient's. If your email is hosted on a service provider like Gmail, then it, too, is subject to attack. There are network connections between these email providers. How could you possibly know if all those connections are secure?

And that's not the only places where a copy of your email might be stored. Each email service provider keeps messages in archive on its own servers, which can be hacked and messages downloaded by cyberthieves. The bottom line: once an email message leaves your server, or leaves the sender's server, it's out of control.

What can you do? The first and simplest rule of cyber safety is never to send sensitive information in an email message or an attachment. That means avoid including Social Security numbers, passwords, sensitive tax or investment account information, and even date of birth in your messages, even to people you trust. If you must communicate this type of information, there are a variety of much safer ways to share information, including ShareFile, PeerLink, Box, FileCloud and DropBox. Or you could encrypt your email messages using programs like Infoencrypt or SafeGmail. The messages are encrypted at the sender's computer and decrypted within the recipient's browser, and they remain encrypted in both the sender's and receiver's email boxes. Hackers who gain access to your computer, to the service providers or the archives come away with nothing but unreadable gibberish.

Yes, protecting yourself sounds like a hassle. But all of these programs, and others, are much more user-friendly than they were ten years ago. And being careful with your messages is a lot less time and trouble than dealing with a stolen identity or having your personal information floating around the Dark Web.

Markets Rally On Rate Cut Hopes
Barry Ritholtz

Hold aside the obvious contradiction for a moment - Why does the  greatest economy ever necessitate rate cuts? - and consider for a moment the effective jawboning at the Federal Reserve. POTUS on down have been demanding lower rates, which markets like, and the President equates higher stock prices with successful ratings.

Moving the Fed to cut rates has been a priority to this administration - never mind that POTUS  appointed two hawks as Chair and vice-chair, who may have had the wrong policy views, but at least were of  appropriate height.

We have seen a yuuge move higher in markets since members of the Federal Reserve made noise that recognized the demand for "rates to be lower." Even if it was insincere posturing to get POTUS off of their backs, the markets really really liked it.
Here's the thing: What do markets know? When it comes to the Federal Reserve future actions, apparently not much. Torsten Sløk explains:
Quantifying the impact of the US trade war is almost impossible, but the market seems convinced that the trade war will lead the Fed to cut rates significantly. The problem is that the market doesn't have a great track record at predicting what the Fed will do, see chart below.



"A mind that is stretched by new experiences can never go back to its old dimensions . "

-Oliver Wendell Holmes SR.

Alexander Financial Planning, Inc. | | tguthrie@afp-advisors.com