Archive for Financial News

Charitable Giving Exceeds Pre-Recession Levels

Now, this is the kind of news I like to see.  Charitable giving from all sources was $358 billion in 2014, the highest amount since its 2007 peak.  Fifty four percent of the year over year growth from 2013 was driven by individuals.  See, we don’t all have to be Bill and Melinda Gates to make a difference in our communities.

Americans are among the most generous citizens in the world, with charitable donations currently about 2.1% of gross domestic product.  As an affluent nation, can we do more?  Probably.  According to the 2012 World Giving Index (which takes into account monetary donations, volunteering time, and helping a stranger), the US ranks 5th on its index score.   Who is doing better?  Australia, Ireland, Canada, and New Zealand.

Talking to your financial adviser, estate planning attorney, and children about your charitable intent is important.  Planned giving throughout life and after you passing will give you great joy and allow you to demonstrate your values to the next generation.



Charitable Giving Rises Past Pre-Recession Mark by Diane Cardwell, New York Times, June 16, 2015,

World Giving Index 2012, Charities Aid Foundation, December 2012,


If these topics sound like they would be of interest to your employees, sales conference, or professional organization, contact me at 303-324-0014 or for more information.

Wild is a Mild Word to Describe the Stock Market Lately

I don’t like to feed into the media hysteria when it comes to stock market drops.  As I say repeatedly to clients, friends, in this blog, and to my cat, stock market recessions are a normal part of the economy.  They last on average 12-18 months, so the pain is temporary.  Drops in the stock market are buying opportunities, not signs to sell at a loss.

By the way, I’m not saying we are in a recession.  You never know you’re in a recession until it’s almost over!

However, my loyal readers may be feeling uneasy, so I shouldn’t ignore your concerns, either!

I like this article from the Wall Street Journal (via about what not to do during volatile stock markets.  The five “don’ts” are:

    1. Don’t panic
    2. Don’t fixate on the news
    3. Don’t be complacent
    4. Don’t get hung up on talk of a “correction”
    5.  Don’t think you or anyone else knows what will happen next

For more details, click through to the article:


If these topics sound like they would be of interest to your employees, sales conference, or professional organization, contact me at 303-324-0014 or for more information.


Money Magazine’s 101 Ways to Build Wealth

In the May, 2015 print edition of Money Magazine, there is an article called 101 Ways to Build Wealth.  These list-type of articles come around often and say many of the same things, but a few interesting ones I found were these:

“Tip #15:  Don’t Tend to Your 401(k) After a Rough Day at Work.  You save more when you feel powerful, even if it’s for a quirky reason.  A recent study in the Journal of Consumer Research found that people who had just answered questions while sitting in a tall chair were more likely to save money than those on a low ottoman.  Consider reserving your major financial chores for ‘up’ days when you are feeling in command says study co-author Anne Kathrin Klesse.”

If you are looking to buy a house, pay attention to Tip #47:  Look for a nearby Starbucks.  “Homes within a quarter-mile of Starbucks doubled in value, whereas the average home in the US appreciated 65% from 1997 – 2013,” according to Stan Humphries, chief economist at Zillow.

This last tip I picked because it backs up something I’ve said in previous blogs.  Tip #71 says to “Keep Calm and Carry On” with your bond investments in the face of rising interest rates.  “Even if this happens, it’s no reason to flee fixed income. Much of the drop in bond prices will be made up by the higher yields your funds will earn on newer bonds.”

For the full article, buy the May 2015 edition of Money Magazine or subscribe to their online service.


If these topics sound like they would be of interest to your employees, sales conference, or professional organization, contact me at 303-324-0014 or for more information.

Financial Education Provided by Sullivan Financial Planning

Financial Education

A couple of weeks ago, I introduced my education services for the first time in the blog.  Just to let you know, the financial education provided by Sullivan Financial Planning goes beyond pre-retirement planning.  Other engaging and helpful topics that you won’t be getting from your 401(k) plan provider include:


  • Financial Tools for Kids:  How Not to Raise Spoiled Brats Who Suck The Financial Life From Their Parents
  • Stop Making Bad Investment Decisions:  Using Behavioral Finance to Outsmart your Brain
  • College Savings Options for Parents and Grandparents
  • Budgeting and FICO Scores
  • Juggling Multiple Savings Goals


If these topics sound like they would be of interest to your employees, sales conference, or professional organization, contact me at 303-324-0014 or for more information.

Sullivan Financial Planning’s Kristi Sullivan was quoted in a recent post on Financial Advisor IQ

In a recent post on Financial Advisor IQ, Sullivan Financial Planning’s Kristi Sullivan was quoted in the article, Peer-to-Peer Lending: A Fad or the Future? By Chris Latham.

A copy of the article is below.

Peer-to-Peer Lending: A Fad or the Future?

By Chris Latham March 18, 2015

Peer-to-peer lending may serve advisors’ clients on two fronts, experts say. Wealthy clients looking for a high-yield alternative to traditional bonds can invest in funds that pool loans to small-business owners. Meanwhile, business-owner clients who might be having trouble getting a bank loan can secure financing from online marketplaces that connect borrowers and lenders.

But it’s an untested and little-known space for advisors. Skeptics warn these marketplaces will have to accept ever riskier borrowers to maintain their growth momentum. Meanwhile, funds that pool such loans have yet to prove they can survive a serious market downturn. Those risks may explain why some advisors avoid them. And peer-to-peer lending got a black eye recently when its biggest player, Lending Club, revealed a net loss of nearly $33 million for 2014, just two months after raising $1 billion in its December IPO.

None of these factors dissuades Matrix Capital Advisors from putting clients into peer-to-peer investments, according to cofounder Michael Wik. The Chicago firm manages over $600 million for clients with an average net worth of $15 million. About 80% of its clients have 5% to 7% of their portfolios in the Direct Lending Income Fund, which is open to accredited investors.

“I actually feel confident that P2P does a much better job than the banking space at vetting loans,” says Wik. He argues underwriters in the space have as much skill as bank underwriters — if not more, judging by the performance of giant institutions during the financial crisis. “You would have been much better off owning a portfolio of these loans in 2008 to 2009 than loans at a traditional bank.”

Wik hasn’t steered clients toward peer-to-peer loans but says he would consider it under the right circumstances. Although such loans cost more than traditional ones, borrowers get them quicker and face less hassle in the process. The advisor says banks often hesitate to provide financing to entrepreneurs. As evidence, he points to the stress he endured securing a $250,000 line of credit from a small bank to invest in Matrix. “It was like pulling teeth to get it,” Wik says.

Favored Fund

His preferred peer-to-peer fund is the product of Direct Lending Investments, which Brendan Ross founded in 2012 after working as a management consultant and running a few small firms. The fund has about $150 million in assets and is growing by $15 million a month, according to Ross.

Advisors can find the fund on the FidelitySchwab and Millennium Trust custodial platforms. Loans in the fund average about $60,000, one year in duration and default rates of 5% to 6%. Borrowers include doctors and dentists, as well as owners of restaurants and gas stations. They pay interest of 20% to 30%, according to a Direct Lending fact sheet on the fund. Investors, meanwhile, can retrieve their principal with about a month’s notice, and can expect returns of 10% to 12% based on historical data, the fact sheet says. That’s a whole lot of basis points more than what they get from bonds these days. “Fixed income in traditional form is done,” he declares.

Peer-to-peer investments can be suitable for many types of clients, including retirees and widowed grandmothers, according to Scott McCartan, CEO of Millennium Trust. In addition to supporting the Direct Lending fund, the boutique firm also serves as a custodian for Lending Club. Millennium Trust wants to make its mark by specializing in alternative products and sees peer-to-peer lending as a key component.

Advisors with small practices, though, are likely to continue avoiding the peer-to-peer space. A prospect recently asked Kristi Sullivan of Sullivan Financial Planning in Denver whether he should invest in peer-to-peer lending. She admitted she didn’t know much about it and suggested the prospect could try it on his own, by replacing the high-yield bonds in his portfolio with peer-to-peer holdings. Sullivan, who mainly charges project-based fees, says she works in a “plain-vanilla world” and has few clients who would consider peer-to-peer lending.

Allan Katz of Comprehensive Wealth Management in Staten Island, N.Y., so far hasn’t fielded any questions about peer-to-peer lending, but he’s not impressed with the investment concept. According to Katz, who collects commissions and other fees as well as a percentage of assets, such funds lack sufficient historical track records, asset levels and lending requirements to make him feel comfortable recommending them. “These companies are not mature,” he says, “and inherently carry a great deal of risk of going out of business.”

Sullivan Financial’s Kristi Sullivan Quoted in Investment News Article

Investment News

In a recent edition of Investment News, Sullivan Financial Planning’s Kristi Sullivan was quoted for the article, Advisers Preach Calm, Buckle in as Markets Bounce by Jeff Benjamin. A copy of the article is below.

Advisers preach calm, buckle in as markets bounce

Prepare clients for market volatility by thinking long term and being proactive

By Jeff Benjamin   |  January 8, 2015 – 11:49 am EST

Financial advisers aren’t exactly shrugging off the recent bout of stock market volatility that has ushered in the New Year, but they’re also not ready to call it the start of a much larger pullback that should be addressed with portfolio adjustments.

“I’m a buy-and-hold and rebalance kind of gal, and I tell my clients we’re in it for the long run,” said Kristi Sullivan, owner of Sullivan Financial Planning.

Like a lot of financial advisers over the past few weeks — since the Dow Jones Industrial Average peaked above 18,000 and has since fallen below the latest milestone — Ms. Sullivan is reminding clients to keep things in perspective.

“Even though the total points look big, percentage wise, the moves are not really that big,” she added.

Both the Dow and the closely-watched S&P 500 Index opened on Thursday down less than 1.5% from the start of the year, which is described by some advisers as a normal January pullback in the wake of a 14% gain for 2014. And by midday Thursday, both market gauges were trading higher and had erased their 2015 losses.

“I think we’re going to continue to experience this kind of volatility for the first half of the year, and then the market will gravitate upwards,” said Robert Foley, an adviser with Raymond James.

Even though Mr. Foley believes the January market volatility is a logical reality of tax management and rebalancing during periods of low-volume trading, he employs a proactive approach with clients in times like these.

“When there is this kind of volatility, I’m calling them, I’m not waiting for them to call me,” he said. “Most of my clients will say they’ve been watching it and paying attention, but that they are fine.”

In many respects, investors might have gotten spoiled by the stock market’s general strength and relative calm over the past few years. It has been more than three years since the U.S. stock market has experienced a decline of 10% or more.

Such market corrections historically have happened about once every 18 months.

What’s more is that there are a few fresh catalysts for a pullback, including the rapidly declining price of oil, which feels good at the gas pump but has several potential macro-market and economic repercussions.

“Clearly, oil is the sound bite, but market volatility is something I think we’ll see throughout the year,” said Dorothy Weaver, chairman and chief executive of Collins Capital.

The stock market volatility, which has been illustrated by a string of 200-plus point daily swings by the Dow over the past week, is a result of financial markets, assets and global central bank policies falling abruptly out of sync, she explained.

“We’re coming off a period of historically low volatility when everything was synchronized and there was the assumption that the Fed would take care of everything,” Ms. Weaver said. “Now, it is becoming much more about divergence among asset classes, sectors and even countries, and the strength of the dollar is part of that divergence.”

The surging strength of the U.S. dollar is part of the global divergence because it will hamper exporting economies pegged to it.

Measured in an October survey of more than 5,200 CFA Institute members from around the world, the advice industry has become largely bullish on everything except the price of oil.

According to the findings, which were released in December, the respondents are expecting a positive year for gold and U.S. Treasury bonds, as well as stocks in the U.S., Europe and Japan.

The respondents expected the price of oil, which was trading at around $95 a barrel when they were surveyed in October, to fall to around $91 in 2015. But the commodity has since fallen to below $49 a barrel.

In terms of individual stock market potential, more than a third of the respondents identified the U.S. market as the best place to invest in 2015, followed by China, which was favored by 9.3%, India, 8.9%, and Russia, 6.2%

That compares with a year ago, when 26.3% of respondents favored U.S. stocks, followed by 10.7% for China, 6.2% for Japan and 6.1% for Germany.

“People see the headwinds with things like the emerging markets slowing down, and geopolitical unrest, but when asked which markets to invest in, the U.S. comes out on top again,” said Matt Orsagh, director of capital markets policy at CFA Institute.

Brian Power, chief operating officer and co-founder of Gateway Advisory, said he plans to put all the crosswinds into perspective for clients as he starts scheduling annual reviews this month.

“Most of our clients haven’t even realized the markets have been down because their performance reports aren’t reflecting it yet, but as we start having client reviews we’ll definitely be having those conversations,” he said. “I think people will be relatively pleased with how they did last year, but we haven’t had any real volatility in so long, I think investors have been getting lulled to sleep a little bit.”

Mr. Power admits he didn’t expect to see the abrupt market movements that kicked off the year.

“Overall, I was a little surprised by the swiftness of some of the pullbacks, but the pendulum always swings too far one way or the other,” he added. “And these sudden pullbacks are fine by me because I’d rather see that than several down months of stocks slowly correcting.”

While some advisers have found that investors have become more conservative and attuned to risks since the 2008 financial crisis, David Schneider, founder of Schneider Wealth Strategies, believes his clients have hardened to volatility since the market’s low point in March 2009.

“I don’t think we’ve had enough downside volatility to really distress people yet,” he said. “The people who made it through the financial crisis have become somewhat numb to short downside moves and I think it will take more than a few days or weeks of this to really concern people.”

Keeping market moves in perspective is a large part of helping clients deal with volatility, according to Charles Sachs, president of Private Wealth Counsel.

“Investors don’t mind market volatility, they mind downside volatility,” he said. “On the downside, I remind people that it’s a great time to add to your portfolio and that they should be embracing some of this volatility, because if there’s no volatility in your portfolio it’s just a certificate of deposit.”

When dealing with clients at times like these, Mr. Sachs tries to keep the focus on the long-term view.

“If you’re 50, and you’re going to live another 40 years, you have to ask yourself what is actionable about a market pullback,” he said. “It’s a marathon not a sprint, and perspective goes a long way.”

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