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.


Summer Dreams

For many of us, Memorial Day signifies the start of summer. For others, it may be the end of the school year, the summer solstice, lightning bugs, or feeling the sun's warmth. Whatever your trigger event is, summer brings feelings of optimism. Fill up your glass with something cool and refreshing.

What would that be? Lemonade, reading a good book outdoors on a sunny day, sharing a picnic with family and friends, dipping your toes in a cool stream during a hike, taking a vacation, or attending an outdoor event. 

We encourage you to determine what makes you feel your best and pursue this in the short term. Summer doesn't last nearly long enough so there is no time to waste!


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. 

Program Recap

The Legacy Planning Workshop was well received by those who attended in April. Many were amazed and surprised as it was a moving interactive experience involving a deep dive into your memory bank. Special thanks to speaker, Susan Turnbull for delivering a thought-provoking presentation.


The 6th Annual Grandview Chocolate Walk took place on Thursday, May 30th. AFPI treated 188 chocolate lovers to their choice of milk or dark chocolate bars. It is always a fun experience interacting with the participants who are in good spirits. If you missed it, try it next year!

New Hire

AFP is seeking a part-time Support Specialist/Team Member. Perks include flexible working hours, and a fun, relaxed environment. Do you know a candidate who may be a good fit? Please send them our way!

On a Personal Note:
Teri's World - After madly planting most of her vegetable garden at the beginning of May, Teri and Gene went on holiday to Italy for 2 weeks. They hiked the Amalfi coast for a week, took a fast train to Florence and spent the remainder of their time in Tuscany and Florence. The weather was unusually cold and rainy for the hiking part of their trip, but the beauty of the people, flowers and food made up for any weather related issues. It's been 39 years since she'd been to Italy and she is hoping the next trip won't be that long of a wait! It's great to be back home and she is looking forward to spending time with family and getting things done in the office. 

Wh at a bou t Bob? - Bob & Christine have had a good May. Bob went walleye fishing on Lake Erie. It was a cold, windy day with 3-5 foot waves. However, the group had a pretty good catch.
Bob & Cris also went camping at Alum Creek State Park with their neighbors over the Memorial Day weekend. It was a blast and the weather was actually very good until the final morning, but even that day turned out to be really nice. 

They are gearing up and really anticipating their trip to Italy. Details and pictures to come in the next newsletter.

Tracey's Time - School is out and the family is preparing for this summer's camping trip. We are headed to the four corners states with stops at several National Parks. We are hoping for good weather especially while traveling through tornado alley!

(Current Economic and Investment Information)

  • REAL ESTATE - The median sales price of existing homes and condos sold in the 9 counties that make up the San Francisco Bay Area was $830,000 in March 2019, down 0.1% on a year-over-year basis, the first time a year-over-year drop has occurred in the Bay Area since March 2012 or 7 years earlier(source: CoreLogic, Inc.).
  • TAXES - As of 12/31/17, there were 77 million homeowners in the USA, of which 34 million claimed a mortgage interest deduction on Schedule A of their 2017 Form 1040. As of 12/31/18, there were 79 million homeowners in the USA, of which just 14 million claimed a mortgage interest deduction on Schedule A of their 2018 Form 1040. The reduction in the use of the mortgage interest deduction was the result of the increased standard deduction created by the "Tax Cuts and Jobs Act of 2017" (source: Tax Policy Center). 
  • TARIFFS - 59% of 1,804 American small business owners (SBOs) surveyed in February 2019 report that as of that date, the US-China trade war and resulting tariffs had no impact on their businesses. The SBOs surveyed have less than $5 million of annual revenues and less than 100 employees (source: Bank of America).
  • CHINA & U.S. TARIFFS - US companies exported $120 billion of goods to China in 2018. Chinese companies exported $540 billion of goods to the USA in 2018. The current US-China trade war began with the implementation of tariffs on 7/06/18. US companies exported $26 billion of goods to China in the 1st Q 2019. Chinese companies exported $106 billion of goods to the USA in the 1st Q 2019 (source: Commerce Department).
  • RETAIL - YTD through Friday 5/17/19, approximately 6,400 retail stores have gone out of business and closed across the USA, more than the 5,864 stores that closed nationwide during all of 2018. This year's closures are on pace to exceed the all-time record of 8,139 store closures in 2017 (source: CoresightResearch).
  • U.S. SALE - 62 publicly held US companies produced at least $1 billion of sales per week in 2018, up from 58 companies that accomplished that level of weekly sales in 2017. Just 1 domestic company generated more than $1 billion of sales per day during 2018 (source: Fortune).
  • COLLEGE SAVINGS - Colorado Governor Jared Polis signed HB19-1280 on 5/13/19, state legislation that allows the parents of a Colorado newborn to establish a college savings account with an initial $100 tax-free contribution from the state. The law becomes effective 1/01/20 (and runs for 20 years) for each child born or adopted in Colorado (source: Colorado General Assembly).
  • COLLEGE - During the 2018-19 school year, American colleges awarded 1.88 million bachelor's degrees, down from a record 1.96 million degrees from the 2016-17 school year (source: Nat'l Ctr. for Education Statistics).
  • RECYCLING - Just 15% of plastic is recycled globally, i.e., 85% of plastic ultimately is burned, dumped into a landfill or dropped into the ocean (source: United Nations).
  • A LOST GENERATION - The economy of Greece is projected to grow +2.4% in 2019 after growing +2.1% in 2018. If Greece's economy continues to grow at an annual rate of +2% per year going forward, it will not recover back to its 2009 "pre-crisis" size until the early 2030s (source: International Monetary Fund).
  • NEWBORNS - Our nation's "general fertility rate," defined as the number of births per 1,000 women between the ages of 15-44, was just 59.0 births in 2018, a record low for birth data that has been tracked nationally since 1909 or for the last 110 years (source: National Center for Health Statistics). 


Who Pays in the Tariff Wars?

Global stock markets have been spooked by the escalating trade disputes between the world's two largest economies: China and the United States. And there is no evidence that the dispute is about to be resolved. On Friday, U.S. President Donald Trump raised tariffs on $200 billion worth of
Chinese goods, and began taking steps to tax nearly all of China's imports. The new tariff levels are an unprecedented 25% of the value of the Chinese goods coming into the U.S., raising the costs of seafood, luggage and electronics. China, meanwhile, has placed tariffs on nearly all of America's exports into the Middle Kingdom, including agricultural products.

This is not the first trade dispute the U.S. has engaged in since the Trump Presidency; steel and aluminum products coming from abroad were hit with tariffs and import duties early in the presidency, followed by various other measures. The stated idea was to reduce the U.S.'s trade deficit with the rest of the world; however, the overall United States trade deficit with the world increased 1.5% in March to $50 billion.

But many taxpayers seem to be confused about how tariffs work. The President has said that American tariffs on Chinese products are bringing in unspecified "billions" to the U.S. government. That may be true, but the source of those "billions" is not China or Chinese companies. Importers
pay the import taxes when the items they've purchased overseas cross the U.S. border. With import taxes as high as 25%, it is all-but-guaranteed that the price of these items will be higher when sold to American consumers.

If the importer-which might be a manufacturer who has components manufactured abroad or a retail company like Wal Mart-decides to absorb some of the tariff cost, then that shows up in lower profits for the American company. So when an American consumer buys an iPhone, the cost might go up $160-which is the additional amount that would be paid to the U.S. government. Or Apple Computer could eat the cost and reduce its overall earnings by 24%. The same is true with goods like vacuum cleaners, electronics, computer monitors and power adapters.

There are arrangements where the importer and exporter negotiate for the exporter to pay the tariff -the term for such an agreement is DDP, or "Delivery Duty Paid." But once again, the tariff raises the cost of the item, and the ultimate bill comes due to the consumer who buys the product.

So ultimately, U.S. tariffs on imported items, shipped from China or any other country, represent an additional tax directly on the wallets and purses of American consumers-or on the earnings of American companies that decide to absorb some of these costs.

There may be additional economic impacts, such as what American farmers-particularly those who grow soybeans-are now experiencing. When the cost of American products go up due to retaliatory tariffs imposed by China, Chinese consumers and importers can go to different markets, where they can buy items that are not burdened by the costs of import duties. Chinese importers have shifted their purchases of American crops to South America, which has long sought a foothold in the world's largest consumer market.

Wouldn't that work the other way around? One issue is that many Chinese companies are government-owned or government-supported, so during an escalation of trade war conflict, the government of the most populous nation on earth will do what the American government will not:
stabilize sales by subsidizing prices or making up for losses while the negotiations continue.

Most economists believe that tariffs impede global trade and the health of the global economy. And tariffs create uncertainty about whether companies can rely on existing supply chains or sources of manufactured items that go into their final products, like mobile phone devices and automobiles. This is why the imposition of additional tariffs, and the threat that they will continue into the future, is spooking the investment markets. The U.S. Treasury is definitely getting fatter as a result of American tariffs on Chinese goods. The question that stock market analysts and traders are asking is whether this is good for the American consumer and the U.S. economy as a whole.


"Like a welcome summer rain, humor may suddenly cleanse and cool 
the earth, the air and you. "

-Langston Hughes

Alexander Financial Planning, Inc. | |