A | A | A

label1 label2

Lauren's Blog

Lauren’s blog covers topics that impact your finances, your family, and your future. Is there a topic you’d like Lauren to tackle? We’d love your suggestions and feedback.

In Your Best Interest: Our Fall 2018 Newsletter

In Your Best Interest: Our Fall 2018 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.

Market Highlights Q3 2018

One lens we use to assess our economic and financial wellbeing is market prices for US stocks and foreign shares of corporations. From that perspective, Q3 was quite favorable for investors. US stocks and global stock indexes rose on strong economic indicators and corporate earnings. As you can see below, each of the US indexes posted solid gains, and global stocks overcame declines seen in the first half of the year. Prices for 10-year Treasuries dropped by the end of the quarter, pushing yields higher by 20 bps.

If your portfolio lagged compared to these impressive gains, don’t be alarmed—and don’t worry. A balanced portfolio is designed to avert risk by including US bonds which saw negative returns in the quarter due to the inverse relationship to rising interest rates. A balanced portfolio further includes global stocks whose returns were lower than the US market. Balancing risk and reward is the goal, and your portfolio should always reflect that reality. 

That said, current economic indicators point to continued growth. Jobs are up 196,000/month for the past year, and hourly earnings are up 2.9%. Interest rates are the highest they’ve been since April 2008 which signals a strong economy, and GDP growth is at 4.2%. Home sales are stable, consumer spending remains strong, and consumer confidence is at an 18-year high.

One of the few distractors from growth has been turmoil in international trade. The trade battle between the US and China has dampened Chinese stocks, though higher numbers at the end of Q3 hint at decreasing concern about the real impact of the trade war. Brexit—and its potential impact on commerce in the UK and Europe—remains uncertain. On the plus side, a revamped NAFTA (USMCA) agreement should ease tensions between the US and our trading partners in Mexico and Canada; Japanese stocks are approaching highs not seen since the early 1990s; and Germany, France, and the UK all saw gains in their respective stock benchmarks.

Will growth approach 4.0% in the last quarter of the year? Are security prices “too high”? Is a recession inevitable? We know that today the US economy is strong and security prices are exuberant. As always, the prudent investor stays invested, stays the course, and sticks to the basics with a balanced, risk-appropriate approach to growing and protecting your wealth through all market cycles.

Continue reading
435 Hits

In Your Best Interest: Our Q4 2015 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.

Market Highlights: Q4 2015

The Force Awakens” was the theme in 2015—on the big screen and in real life. Just as the characters in Star Wars were forced to face their old rivals, global conflicts increased around the globe and the market reacted. Economic stress in Greece and China, falling oil prices, and terrorist attacks in Paris and San Bernardino, CA, impacted equity markets worldwide.

Of all the stock indexes, only the NASDAQ posted a gain for 2015. The S&P 500 index of large US companies ended with the first down year since 2008 while smaller and riskier US companies lost 5.7%. Developed international companies were down 3.3% despite a strong Q4, commodity-dependent Emerging Markets lost 17% for the year as oil prices reached an 11 year low, and bonds prices fell in the quarter as Treasury yields increased. 

When you look at your year-end statement, you may see that portfolio values trailed the Dow and the S&P 500. The reason? A diversified portfolio includes non-correlated assetsstocks that go up or down at different times—including energy and commodity stocks that fell due to low oil prices. Americans are smiling at the gas pump, but their portfolios are feeling the hit. Bonds investors were also disappointed as higher quality, short-term instruments that often provide defense against lower stock prices delivered less-than-expected yields.

Clearly it’s good to be an investor when you stay disciplined and stay the course. Despite the flat numbers, the three- and seven-year annualized returns of the S&P 500 were 12.7% and 12.4%, respectively, and the MSCI EAFE delivered 2.3% and 4.7% in the same timeframe. And remember, while the price of equities declined in 2015, you did not lose value. To restate Benjamin Graham’s advice to Warren Buffett, “Price is what you pay, value is what you get.”

On another positive note, at the end of December, the Federal Open Market Committee raised interest rates .25% for the first time since 2006. The increase reflects the Fed’s view that the US economy is strengthening, and their decision was based on positive economic data: unemployment ended the year at 5.0%, GDP growth slowed to 2.0%, and inflation remained below the Fed’s 2.0% target.

So what will 2016 hold? The only thing we can predict with any degree of certainty is that the US will have a new President. Bull market or bear market, no one knows. Investors should certainly expect continued volatility in equity prices, but as I’ve said time and again, the market is always headed in one direction: up. Our strategy is a disciplined approach to capital markets—staying diversified, keeping costs low, managing taxes, and rebalancing when needed—and we will continue to work with you to align your investment approach with your life goals, whatever they may be.

There’s no doubt the world is changing at a record pace, and it may feel like your life and goals are changing just as fast. The Force has indeed awakened, but we’re always here to help…no matter what the universe throws our way in the future.


Continue reading
3112 Hits

In Your Best Interest: Our Q3 2015 Quarterly Newsletter

Click here to view the full newsletter, including recent news, important Q4 dates to remember, financial tips & tools, and more.




The best thing about the third quarter of 2015 is that it is over.


By the close of the quarter, most investors experienced a significant decline in their portfolios. August was especially dramatic, delivering a stock market decline of 11% in a span of just seven trading days. During the final week of the quarter, there were net stock mutual fund redemptions of almost $30 billion—the result of investors rushing to the exits in an attempt to thwart further losses.


What happened to crush the optimism we’ve been feeling during the 6-year bull market that followed the Great Recession? Two stories dominated the headlines: the economic collapse in China and the Federal Reserve’s decision not to raise interest rates. China—the world’s second largest economy—saw its overheated stock market bubble burst and its currency devalued. The realization that China’s government isn’t a source for honest economic data cast doubt on China as the key driver of global economic growth. Although US economic indicators remain strong, the Fed opted not to raise interest rates because inflation hadn’t hit the 2% target established back in 2012. The decision to keep interest rates flat was interpreted by many as a sign of domestic economic troubles, adding to the near-panic that was already occurring on Wall Street.


Disciplined investors stay focused on long-term economic growth and avoid reacting to emotions. Even the most informed investors struggle to rise above their emotions when headlines scream and indices drop 10-15% in less than three months. Here are three facts that may help you through the turmoil:

Year-to-date, losses remain relatively low.
Even with the recent volatility, the long-term direction of the market is always up. Unless you are forced to cash out all of your investments today, you’re still positioned for growth. (See my October 1 blog to learn more.)

Bearish markets tend to follow bullish markets.
Predicting short term prices is a fool’s errand. This recent decline is a market correction (defined as a drop of 10% or more). Price declines are like pruning back overgrowth and create a healthier market going forward.

The US economy is strong. 
Consumer income, consumer spending, and housing starts are all up. Household net worth is at an all-time high, household debt has fallen by more than 30% since 2009, and home mortgage rates remain near alltime lows. Inflation has averaged only 2% for the past ten years, and the US dollar remains one of the of the world’s strongest currencies. 

Ultimately, I remain an optimist. Owning equities (stocks in great global companies) means that you participate in the long-term growth of the global economy. Market indexes and equity prices will continue to be volatile, and that volatility may trigger stomach-wrenching concern. As your advisor, my goal is your long-term success. As a committed capitalist, my message continues to be: maintain a balanced perspective, stay calm and disciplined, and reap the rewards that capital markets deliver to participants.US




Continue reading
3529 Hits


Contact Us

4299 MacArthur Boulevard
Suite 100
Newport Beach, CA 92660
Phone: 949-477-4990
Fax: 714-464-4481
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.




All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >