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FINANCIAL FOCUS
A Newsletter from
Fleishel Financial Associates
An Independent Registered Investment Advisor
April 2015
Inside this issue:
Market & Economic Themes for 2015
Economic and Market
Update
1-3
How Does Divorce
Affect Social Security
Retirement Benefits?
4
By Tom Fleishel CFP®
Though better than the alternative, slow growth seems to be the continued,
tiresome theme for a recovering U.S. economy. A few key drivers are responsible
for this ongoing trend. The drop in oil prices has been a big positive for the
economy and could add about 1% to GDP growth according to Dr. David Kelly,
chief strategist for JP Morgan. Lower interest rates have also kept the economy
going and even though the Federal Reserve has indicated they’ll raise short-term
On a Personal Note
5
rates, the question remains as to when. Most are expecting sometime this fall.
Unemployment, now around 5.5% has certainly been a help but real wage growth
has not been occurring as the slide below illustrates.
Contact Info
6
Calendar Notes
6
Other positive indicators are continued light vehicle sales growth, housing starts,
improving home prices and capital goods orders. On the other side of the coin, the
U.S. dollar has risen 20% relative to other currencies since July of last year, which
actually puts a drag on growth and for every 10% increase equates to a 1% decrease
in GDP growth. So the expectation is lowered to about a 1.5% annualized GDP
growth, which actually is a great indicator for more attractive, predictable stock
performance.
Page 2
FINANCIAL FOCUS
Economic and Market Update (Continued)
Equities - What mostly drives stock prices is the actual earnings made by corporations and the expectation of those
earnings. When companies report lower than expected earnings, short-term traders/investors can react quickly with
selling pressure. Based on forward looking earnings expectations, the S&P 500 index is still “fairly’ valued at about 17x
earnings with the 25 year average about 15.7x earnings. However, with over a 200% run up on this index alone since the
last bottom trough in March 2009, many are concerned about the next shoe to drop.
Based on history, what are the key indicators of severe bear market drops? Based on the slide below, it is 1)
Commodity shocks (severe spikes in oil for example); 2) Recessions; 3) Sharp rises in interest rates and 4) Extreme stock
and bond valuations.
None of these indicators are looming large at the current time even though rates should go up- they’re not expected to
rise significantly. Also, there are no other types of “lower risk” assets producing any type of decent returns. Cash is
paying almost 0% (or after inflation and taxes, about -2.5%) , CD’s are not much better, bonds are at risk with rising
rates, so investors have few options.
Page 3
FINANCIAL FOCUS
Economic and Market Update (Continued)
The global economy is a different
matter as they are entering their
own
versions
easing”
or
of
“quantitative
lowering
rates
stimulate their economies.
to
The
established economy index (MSCI
EAFE ) has recovered only about
half of what the U.S. equities have
so valuations are much more
attractive oversees, thus causing us
to maintain a healthy exposure to
various international equity and
bond categories.
Once again,
diversification is the proven winner
over
time
with
significant
reductions in portfolio risk.
apologize
for
the
busy
I
but
impactful slide to right, but in a
one year, short-term period, any category can beat all the others but observe how in the far right column, the S&P 500,
(while the strong contender for the last few years) ended up performing lower than diversified (asset allocation) mix at
4.2% annualized for 15 years with 17.3% volatility vs. 5.3% with 13.7% volatility measure. Higher return, lower risk is what
most investors are looking for over the long-term. In any given year, a diversified portfolio will not ever be the best
performer, but also never the worst, because it has a mix of all the categories.
While you cannot purchase
an index exactly in each of
these, our goal is to find the
top
performing
active
managers in each space that
have
outperformed
their
respective benchmark on a
risk
adjusted
appropriate
basis.
mix
for
The
each
investor is determined by an
intentional
assessment
your
risk
age,
of
tolerance,
income needs, phase of life
and tax considerations, to
name a few.
Page 4
FINANCIAL FOCUS
How Does Divorce Affect Social Security Retirement Benefits?
One of the challenges of planning for retirement is that an unexpected event, like
divorce, can dramatically change your retirement income needs. If you were counting
on your spouse's Social Security benefits to provide some of your retirement income,
what happens now that you're divorced?
What are the rules?
Even if you're divorced, you may still collect benefits on your ex-spouse's Social Security
earnings record if:
 Your marriage lasted 10 years or longer
 You are age 62 or older
 Your ex-spouse is entitled to receive Social Security retirement or disability benefits, and
 The benefit you're entitled to receive based on your own earnings record is less than the benefit you would receive
based on your ex-spouse's earnings record
If you've been divorced for at least two years, and the other requirements have been met, you can receive benefits on your
ex-spouse's record even if he or she has not yet applied for benefits.
How much can you receive?
If you begin receiving benefits at your full retirement age (66 to 67, depending on your year of birth), your spousal benefit
is equal to 50% of your ex-spouse's full retirement benefit (or disability benefit). For example, if your ex-spouse's benefit at
full retirement age is $1,500, then your spousal benefit is $750. However, there are several factors that may affect how much
you ultimately receive.
 Are you eligible for benefits based on your own earnings record? If so, then the Social Security Administration (SSA) will
pay that amount first. But if you can receive a higher benefit based on your ex-spouse's record, then you'll receive a
combination of benefits that equals the higher amount.
 Will you begin receiving benefits before or after your full retirement age? You can receive benefits as early as age 62, but
your monthly benefit will be reduced (reduction applies whether the benefit is based on your own earnings record or
on your ex-spouse's). If you decide to receive benefits later than your full retirement age, your benefit will increase by
8% for each year you wait past your full retirement age, up until age 70 (increase applies only if benefit is based on your
own earnings record).
 Will you work after you begin receiving benefits? If you're under full retirement age, your earnings may reduce your
Social Security benefit if they are more than the annual earnings limit that applies.
 Are you eligible for a pension based on work not covered by Social Security? If so, your Social Security benefit may be
reduced.
Planning tip: If you decide not to collect retirement benefits until full retirement age, you may be able to maximize your
Social Security income by claiming your spousal benefit first. By opting to receive your spousal benefit at full retirement age,
you can delay claiming benefits based on your own earnings record (up until age 70) in order to earn delayed retirement
credits. This can boost your benefit by as much as 32%. Because deciding when to begin receiving Social Security benefits is a
complicated decision and may have tax consequences, consult a professional.
What happens if one of you remarries?
Benefits for a divorced spouse are calculated independently from those of a current spouse, so
your benefit won't be affected if your spouse remarries. However, if you remarry, then you
generally can't collect benefits on your ex-spouse's record unless your current marriage ends.
Any spousal benefits you receive will instead be based on your current spouse's earnings record.
What if your ex-spouse dies?
If your marriage lasted 10 years or more, you may be eligible for a survivor benefit based on your ex-spouse's earnings
record. For more information on how divorce may affect your Social Security benefits, contact the SSA at (800) 772-113 or
visit socialsecurity.gov.
Broadridge Investor Communication Solutions, Inc. Copyright 2015
Page 5
FINANCIAL FOCUS
On a Personal Note by Tom Fleishel
On a Personal Note:
Continuing from last year, Becky has had some continued health concerns this time related to a
reoccurring herniated disk issue from two vertebrae in her neck along with a bone spur impacting her
spinal column. After failed attempts of physical therapy and a cortisone injection to relieve the pain and
numbness, we’ve decided to have the fusion surgery for two vertebrae to provide a more lasting solution.
Just speaking to another doctor recently he expressed how we should be grateful that surgery is an option
when many times it is not. So thankfully she’s in good hands with a top spine specialist who’s also a client
and friend who has performed the same procedure on many other folks we know that have had lasting
results. Before all the pain really became unbearable, we were able to sneak off for a quick trip to St. Kitts
to enjoy some much needed R&R. I was able to get in a great
scuba dive including a wreck and reef dive where we
encountered numerous Moray eel, lobster, parrot fish and even
a decent size nurse shark.
Meanwhile, Marcus and Vika have been excelling at their
studies- Marcus has the highest grade in his AP math class as a
freshman at DeLand High.
The assignments, at least so far,
have not been curtailing him from also making the tennis team
and ranked 3rd place and also eating some humble pie along the
way, which wouldn’t hurt him a bit. Vika has been able to ramp up her studies and even out the teenage
emotions and new hormone impact thanks to a much needed ADD medication update. Marcus also had
the opportunity to join a good friend and hunting buddy of mine along with his family for a quail hunting
trip in South Georgia. As the go-to dog handler for our two
pointers, he was also able to take down quite a few rocket
quail with his new 20 gauge Benelli shotgun, all in a safe
manner I understand…
Our grandson Calvin has been gaining some pounds going
into his fourth month as can be seen from the photo of him
sporting his new Georgia Dawgs onesie with the little fat belly.
There’s nothing wrong with his appetite and with the new nub
teeth already appearing, perhaps he can soon be chowing
down on some BBQ at the next home game!
FINANCIAL FOCUS
Our Mission Statement
To provide clarity for our clients’ financial goals by helping them identify their dangers, opportunities, and
strengths while increasing their confidence by working with them to develop and implement their
personalized Strategic Wealth Solution. Through applying our core values and practiced abilities, we are
making an enduring difference in the lives of our clients, team, and community.
How to Reach Us
Please note that we are not able to initiate security or investment purchases or sales via email or voice mail.
You must speak directly to a representative of our office for any trades to occur. For other
communications, our email addresses and phone extensions are as follow:
Fleishel Financial General Inquiries
Thomas B. Fleishel, MBA, CFP®—Ext. 304
Stephen Gunter, MS, CFP®—Ext. 307
Becky Fleishel, MBA, Finance Director
Pate Henderson, Client Service Associate—Ext.306
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
812 N. Woodland Boulevard
DeLand, Florida 32720-2709
386.738.1800
Securities offered through Raymond James Financial
Services, Inc. Member FINRA/SIPC
Toll Free: 800.537.0950
www.fleishelfinancial.com
Our office will be closed
May 25, 2015—Memorial Day
July 3, 2015—Independence Day
(Observed)
The opinions and services of Thomas B Fleishel are independent of Raymond James. The information contained in this report does not
purport to be a complete description of the securities, markets, or developments referred to in this material, is not a complete summary or
statement of all available data necessary for making an investment decision, and does not constitute a recommendation. The information
has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.
This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investing involves risk and
investors may incur a profit or a loss. Past performance is not indicative of future results. Diversification and asset allocation does not
ensure a profit or protect against a loss. Keep in mind that individuals cannot invest directly in any index, and index performance does not
include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary.