Pacific Wealth Management Market Comment

by Jim Kuntz on August 11, 2017

We hope the summer of 2017 has been an enjoyable one for you and your family.

The financial markets and our investment portfolios have been moving upward nicely this year as U.S. and global economies continue to show improving signs of expansion and growth.  With American stock markets hitting all-time highs, we are pleased but remain vigilant to the risks for continued improvement. The majority of those risks, in the near term, appear to be political.

We do not recall a period in history where the media has been generating such an overwhelming amount of noise.  The Talking Heads are having a field day with the maelstrom surrounding the White House and Congress.  Our elected politicians are certainly providing a continual stream of fodder and the world’s media is running with it.  The good, bad, and fake news can sometimes be overwhelming if we allow ourselves to become distracted by the multitude of opinions.  We encourage you to remain focused on what is actually important and factual.  Fortunately the financial markets have been largely discounting the unprecedented drama from our domestic political establishment and concentrating on the encouraging economic results and a reasonably healthy outlook for the next 12-18 months.  Currently, the markets are focusing on the geo-political tensions with North Korea and the rhetoric flying between President Trump and Kim Jong-un.

Washington D.C. seems mired in gridlock despite the House and Senate republican majorities and President Trump in the White House.  No substantial economic legislation has been passed and the unbridled optimism for tax reform and increases in infrastructure spending are diminishing quickly.  When the media begins to concentrate on the upcoming 2018 mid-term elections, our opportunity for the first pro-growth fiscal policy reform in a decade could quickly vanish.

Central banks around the world continue to slowly move away from the era of low and zero interest rates.  Fortunately, inflation remains tepid so rate increases are unlikely to be fast or dramatic. The market outlook for stocks depends on earnings and today’s prospects for earnings growth look good.  One of the largest contributors to the earnings recession of 2014 and 2015 was the appreciating U.S. dollar.  Today that trend has shifted, with the dollar now declining relative to many of the world currencies.  The weakening Dollar is actually providing a tail-wind for multi-national American corporate earnings, as their businesses are becoming more competitive in the global marketplace.

With this competition comes change, and in a growing economy this change can happen exponentially.  In 1990, scientists began working to sequence the 3 Billion DNA base pairs that make up the human genome………….in 15 years.  It took them 12 years and cost $3.8 Billion.  In 2008, the price to create a personalized gene map was $1 Million.  By 2011, it was $100,000. 2014, $1,000 (less than a chest X-Ray). Today you can get an individual genetic report for around $300.  These economics are opening up an array of exciting frontiers for medical science and with them investment opportunities in many other sectors of the market as well.

As we head into the last weeks of summer, many investors will be enjoying their annual summer vacations. Trading volume frequently slows during this end-of-summer period which, counterintuitively, sometimes prompts increased levels of market volatility.

We are settling into our beautiful new office and invite you to come by for a visit.  It is encouraging   that we have received so much positive feedback on our new Pacific Wealth Management Compass Center. Our clients’ personal financial website is a capable resource and an efficient portal to everything in their financial world.  We will be pleased to share more about it with you, along with the improved financial and retirement planning technology we are using to help client goals become reality.


This commentary contains forward looking statements and opinions. These opinions may not develop as predicted. It is our goal to help investors by identifying changing market conditions. However, investors should be aware that no investment advisor can accurately predict all of the changes that may occur in the market.

When someone enters their 60’s, most individuals begin exploring the idea of retirement and a number of important decisions they will need to consider.  One of the most significant, is insuring their health care needs are met once they stop working.  At 65, seniors become eligible for Medicare or Medicare Advantage.  Medicare Advantage is an alternative to Medicare that is provided by private insurers.  Deciding whether to take one or the other can be equally important as deciding when to actually stop working.

The Medicare many of us know is more than 50 years old, and an attractive program as 90% of doctors and hospitals in the U.S. accept it.  Most individuals will not need to change doctors if they enroll in the original Medicare.  This can be especially important when considering the value of your primary physician being aware of your medical history.  Also, specialists do not require a referral to see you within this original plan.

However, there are drawbacks to the Medicare system as it is not a comprehensive plan.  One must enroll in each individual component to receive coverage for that medical area.  For example, Prescription Drugs are covered under Plan D, a separate component of the original Medicare plan.  Basic coverage for dental, vision, and hearing are also not covered and there are no annual out-of-pocket limits for total medical expense exposure.

Alternatively, Medicare Advantage plans do have comprehensive packages.  The Advantage plans may incorporate all of the individual service components that Medicare offers, as well as prescription drug plans, vision, hearing, and dental into one complete plan. The private insurers providing these plans allow considerable flexibility in options and choices for individuals seeking coverage.

One disadvantage of the Advantage plans is their plan networks can change year to year.  Your primary care physician may not stay in the network after a network change, and these customized plans can also be more expensive.

The seven-month initial enrollment period for Medicare begins three months before the month of your 65th birthday and ends three months after that month.  Most people should enroll in Medicare Part A, which provides hospital care, when they turn 65.  However you are not required to do so if you’re still working.  Medicare Advantage plans include Part A and Part B if one decides to use that alternative instead.

Both plans have positive and negative considerations, and there is no clear-cut superior option.  You must evaluate your needs and requirements to make the right choice for your overall retirement plan.


This commentary contains forward looking statements and opinions. These opinions may not develop as predicted. It is our goal to help investors by identifying changing market conditions. However, investors should be aware that no investment advisor can accurately predict all of the changes that may occur in the market.

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