Our Blog
By Joe Pitzl on October 11, 2018
As you arise this morning, you likely know already that the global stock market fell very sharply yesterday. It was the worst day for markets since this past February. The selloff continued overnight in foreign markets, pushing them downward toward their 20-month lows.
Predictably, the news media has a wide variety of things to blame for the simple reality that there were a lot more sellers yesterday than buyers, fueled heavily by machine-trading. Some blame interest rates rising, while others blame trade wars and tariffs, and others blame the Fed.
We need to stop trying to blame anyone or anything, and just accept that markets do this from time to time. Make no mistake, it does not feel good when it happens, but it is far more common than we realize.
And most importantly, times like this are why high-quality bonds are so important to have in a portfolio.
As a brief reality check, this is the 23rd time that the S&P 500 has dropped 5% or greater from its peak since March of 2009. On average, the recovery period has been 42 days. All of them seemed like the world was falling apart at the time. And each time, the market recovered. Continue reading “October Market Volatility”
Posted in Economy, Elections, Investing, Stock Market, Volatility
By Joe Pitzl on July 18, 2018
(Edited from commentary by Larry Swedroe, Director of Research for The BAM Alliance)
For some time now, investors have been very concerned about the potential for a global trade war – a war in which there are not any real winners. That, of course, worries investors, especially those who were taught that the Smoot Hawley Tariffs enacted in 1930 was a major contributor to the Great Depression. While it certainly did not help, the causes of the Great Depression go way beyond tariffs, and the depth of the depression is mostly attributed to poor monetary and fiscal policy decisions by Central Bankers around the globe. The concerns have left many wondering what (if anything) they should do.
First, whenever an investor is concerned about any issue, they should stop and ask themselves this question: Am I the only one who knows about this? Clearly the answer is going to be no. As believers of the idea that market prices already reflect all publicly known information, it is reasonable to discern that stock markets not only reflect what we are reading in the news, but also the odds of these events actually occurring. Thus, unless you somehow believe that you know more than the collective wisdom of all the institutional investment managers, hedge funds and mutual fund professionals (who do about 90% of the trading, and thus set prices), it is too late to act.
Second, ask yourself if you think folks like Warren Buffet are aware of the situation. Again, the answer will surely be yes, and he isn’t doing any selling. Unless you believe you are smarter than Buffett, it is wise to take his advice and avoid trying to time the market.
Third, seek real analysis on the impact, not the opinions of talking heads on the television. Oxford Economics, a global leader in economic analysis and forecasting, calculated the tariffs with China would shave 0.1% – 0.3% off of GDP the next two years. This is a far, far cry from the doomsday scenarios being painted by the news media. We must reiterate here that forecasts are rarely perfectly accurate, but it undermines the reality that the results of a trade war are likely less than most believe. Continue reading “Musings on Trade Wars”
Posted in Economy, Investing, Stock Market
By Joe Pitzl on March 23, 2018
We are thrilled to announce the addition of Richard Hall, CFP® to the Pitzl Financial team. Rick brings two decades of experience in financial services to our firm, hailing from Merrill Lynch, Smith Barney, and Norwest (Wells Fargo).
As a Wealth Advisor at Pitzl Financial, Rick will be instrumental in the financial planning process with our clients, providing individualized advice and strategy, along with the evidence-based investment philosophy you have come to expect. Throughout his career, he has taken great pride in assisting individuals and families with making prudent and impactful financial decisions.
Rick is a CERTIFIED FINANCIAL PLANNER™ professional, and a graduate of Southwest Minnesota State University with a bachelor’s degree in business administration with a finance concentration.
He and his wife, Maggie, and their five children live in White Bear Lake, Minnesota. In his free time, Rick likes to stay active playing basketball with his kids, watching his daughters dance, and searching for monster walleye.
The addition of Rick, along with Justin Gabriel (whom we introduced in our January newsletter), adds a great deal of depth and support to our advisory team.
Please join us in welcoming Rick to the Pitzl team. We look forward to continuing to develop and strengthen our planning capabilities and service model in the years ahead.
Posted in Uncategorized
By Joe Pitzl on February 6, 2018
Global markets have been thumped pretty bad over the last week, and the last two trading days in particular. As of the time of this writing (Tuesday morning, 4:30am), it appears today will open lower as well. Will that hold? I don’t know. It depends on whether traders buy more than they sell today.
Yesterday, the Dow lost more points than any single day in history. This statement, of course, is the headline story for several news outlets. However, in percentage terms, it only marks the 108th worst day in its 121-year history.
Make no mistake, the market fell sharply, but it was far from its worst day ever. Further, the last time we experienced a drop like this was 2011, so it has been about seven years since we felt this roughly once-per-year event.
We wrote and talked with you at length over the last year about how strange of a year it was, where volatility basically evaporated from the global markets. Stocks seemed to be riding a wave of positive economic news toward an endless horizon. Continue reading “Ah…so that’s what risk feels like”
Posted in Behavioral Finance, Economy, Investing, Stock Market
By Joe Pitzl on December 20, 2017
The highly anticipated tax reform we have been hearing much about lately is expected to be passed into law today. While the economic and political implications of this bill will be unknown for some time, we at least have an understanding of the individual changes taking shape that will impact your planning in the years ahead.
My focus in this email is to give you a very general take on what is changing for individuals, and what to consider right away from a planning perspective. Nearly everything available in the mainstream media right now ought to be taken with a grain of salt…on either side of the political spectrum. Very little of what I have been seeing contains much real substance for people. Instead, they either focus on slivers of the bill, or on making a politically biased opinion or hysterical predictions of the impact. And as usual, that goes both directions. Don’t fall for the click bait.
You know where we stand on predictions, whether that be the direction of markets, economic consensus, or the ability of the CBO to project pretty much anything beyond a year or two. We simply don’t know yet, and acknowledging that will help you stay focused on what matters and what you can control.
You also have to look at the bill as a whole, rather than isolating certain components to make a statement. For example, arguing that taking away personal exemptions from families is harmful is extremely misleading without considering that a higher child tax credit will typically more than make up the difference. You are probably hearing / reading that you ought to consider prepaying income or property taxes this year, as those deductions will be limited in the years ahead. However, if you are subject to AMT, prepaying these taxes will save you exactly $0 in Federal income taxes.
Continue reading “Tax Cuts and Jobs Act of 2017”
Posted in Uncategorized
By Joe Pitzl on September 12, 2017
Last Friday, Equifax, one of the major credit reporting bureaus, issued a press release announcing that on July 29 it had discovered “unauthorized access” to data belonging to as many as 143 million U.S. consumers. We have compiled some information that we hope may help you understand what happened and what to do next. There has been a lot of information being thrown around the web the last several days ranging from solid to bizarre conspiracy theories. At the end of the day, this is not likely to disappear overnight, and yes, this is absolutely a big deal.
Equifax has stated its internal investigation determined no evidence of unauthorized activity on its core consumer or commercial credit reporting databases. However, the data accessed includes names, Social Security numbers, birth dates, addresses and, in some cases, driver’s license numbers. In addition, credit card numbers were accessed for approximately 209,000 U.S. consumers and personal identifying information on documents for another 182,000 people.
Equifax has set up a website on which you can enter your last name and the last six digits of your Social Security number to see if you have been affected by the breach.
Many people using this website have received error messages, perhaps due to the volume of people accessing it. Unfortunately, at this time, the results provided by the website can be vague and not necessarily reliable. Considering that the 143 million U.S. consumers affected represent 55 percent of the adult U.S. population over the age of 18, we recommend that you act as if your information was accessed as part of this data breach. Continue reading “Equifax Data Breach – What You Need to Know”
Posted in Economy
By Joe Pitzl on February 14, 2017
We are honored to be recognized as one of the Top 9 Best Financial Advisory firms in the Twin Cities! The commentary below is the review originally posted at AdvisoryHQ.com:
“All of our review and ranking articles are always 100% independently researched and written. Firms do not pay for their ranking or our award emblem. In fact, most firms do not even know that they are being reviewed and ranked by AdvisoryHQ until after our reviews have been published to the public.”
Pitzl Financial Review
Pitzl Financial is a wealth manager and financial advisor in Minnesota, that believes in blending objective financial planning with investment management discipline to help clients preserve, protect, and enhance their wealth through various stages of their lives.
As one of the top teams of financial advisors in Minnesota, the Pitzl team believes that money should not be the central focus of financial decision-making. Rather, the achievement of one’s life aspirations should drive the planning process. Continue reading “Pitzl Financial Named Among Top 9 Best Financial Advisors in Twin Cities”
Posted in Financial Planning, Investing, Press / Awards | Tagged Best Financial Advisors, Best Financial Advisors Minneapolis, Best Financial Advisors St. Paul, Best Financial Advisors Twin Cities, Fiduciary Financial Advisors, Fiduciary Financial Advisors St. Paul, Fiduciary Financial Advisors Twin Cities, Top Financial Advisors, top financial advisors Minneapolis, Top Financial Advisors St. Paul, Top Financial Advisors Twin Cities
By Joe Pitzl on February 3, 2017
As a client of Pitzl Financial, you have likely heard us reframe the modern concept of “Wealth.” While most people today associate the word with being materially rich, the origins of the word can be traced to Middle English, when it meant “the condition of well-being or happiness.”
As we entered the New Year, our office decided to practice what we preach and took a step to increase the “wealth” of the Pitzl & Pitzl and Pitzl Financial teams by investing in our social / cultural capital — we purchased a Ping Pong Table for our newly expanded office space.
However, over a week after the table’s arrival, it remained in scattered pieces on the floor of our office.
An unexpected problem presented itself after we ripped open the box. The table came in a lot of pieces and is quite time consuming to put together! To make matters worse, the tools we have were ill-suited for the task. Continue reading “The Problem with New Years Resolutions”
Posted in Behavioral Finance, Financial Planning
By Joe Pitzl on November 9, 2016
It is the morning of November 9th, and I can see the sun rising in the distance as I write this. Let’s all pause and take one very big, deep, collective breath. It’s over, and we are all still here.
This has been one heck of a ride. We, as a nation, have a great number of wounds to heal, friendships to mend, and divides to bridge, but we survived.
Overnight, as the poll results were coming in, the stock futures market plunged more than 5%. If this looked and felt like the Brexit vote earlier in the year, it certainly was. It is notable that initial market reactions are actually a pretty poor indicator of long-term results.
If you haven’t looked yet, take solace in knowing that the market has recovered a great deal of those initial losses already. As of this writing, the futures market is still down (which indicates the market will likely open lower today) but where it stands as I write this is still comfortably positive for the week.
Whether you are feeling elated and hopeful about the results, or depressed and scared, let’s not get carried away with assumptions about what is going to happen over the next 4 years. History has proven that most of what is discussed during campaigns is dead on arrival in the real world. And before you go there, remember that the four most expensive words in the English language are “this time is different.” Continue reading “America Has Voted…”
Posted in Behavioral Finance, Economy, Elections, Investing, Stock Market, Volatility
By Joe Pitzl on June 24, 2016
When we warned earlier this year to brace for significant market volatility throughout this election year, a “Brexit” is not what we had in mind.
For those of you hearing this term for the first time today, you may want to get used to hearing it. We are going to hear a lot about it in the weeks and months ahead.
What is “Brexit”?
In short, Britain + Exit = Brexit. Yesterday, the United Kingdom went to the polls for a referendum vote on whether to leave the European Union. In short, the leave vote won 52% to 48%.
Why does it matter to you?
First, in the immediate term (ie. today), this is a bit of a shock to the markets. Virtually all economists and politicians were in favor of staying, and the polls leading up to the vote indicated that was the likely result. In fact, global markets had risen significantly this week in anticipation of a vote in favor of the UK staying in.
Today, you woke up to the markets dropping in a pretty severe way. However, it is important to note that this is simply the market repricing what it was incorrectly predicting earlier in the week.
Your headlines are going to read that the European markets are plummeting, tumbling, being routed, and I have even seen the term “free-falling.” Indeed, they are.
However, what none of these headlines even bother mentioning is that the MSCI Europe stock index had risen 9.75% in the last 5 days leading up to today. Today, not surprisingly, the broad European market is down just over 9%, essentially just giving back what it had gained earlier in the week. Continue reading “The Votes are in – “Brexit” Wins”
Posted in Economy, Investing, Volatility
