Fall 2016 Newsletter

Election Results: What is the Financial Impact to Me? 

"Don't buy into the anxiety," cautions Mike Kiley, CEO.

“And the times, they are a-changin’ …” as the Dylan song goes. At Chamberlain Group, we were as surprised as anyone else at the results of the election. Now the question is: How will this affect the economy?  “I’ve received a few phone calls and emails from clients and friends who were concerned about the election and its financial impact,” shares Mike Kiley.  While many financial experts are alarmed about the future, Chamberlain Group is not.  We remain unruffled.  “Don’t buy into the anxiety,” cautions Mike.  “It is important to stay calm.  Our team is completely tuned in and will proactively make recommendations if called for, but our firm stance is to stay the course.”

Emotions run high during an election – and extremely so during this past election. However, it’s important to note that history reveals there is no empirical evidence that the choice of President, or the party controlling the Senate or House, has a profound effect on market performance.  In fact, stocks generally rise over time no matter who’s in charge. 

While roughly half of Americans are content with the results of the elections, half of Americans are disgruntled.  Regardless of which camp you fall into, both groups are likely to modify their investments, and that’s where the trouble begins.

Given the tumultuous landscape and haphazard expert opinion, what’s an investor to do? Chamberlain Group offers three recommendations:

1.      Avoid making emotional decisions.  It’s best to let the dust settle a bit before making any major decisions in your investments or otherwise.

2.      Investing is a marathon, not a sprint. From the moment we meet our clients, we recommend viewing their portfolios as long-term endeavors.  Applying a goal-oriented, disciplined methodology is the best approach to success.

3.      Buy with a margin of safety. Buying assets at a discount to their historical mean price eliminates the need for a crystal ball.  Increase your allocation to beaten-up sectors.

Regardless of how you voted, or your feelings about this President-elect, it’s important to remember that the current President will be in office for no more than eight years.  You, however, are in the game for the long run.

References:

CBS News/Associated Press.  "Donald Trump is President Elect, What Should I Do with My 401K?" cbsnews.com/ November 9, 2016. 

Shier, Suzanne L. and Lavin, Benjamin J. "Tax and Wealth Planning Implications of a Trump Presidency." wealthmanagement.com/November 9, 2016. 

Tepper, Taylor.  “How the Election Will Really Affect Your Investments.” Time.com/Money June 22, 2016.

 

Retiring Advisory Board Member, Yoshi Honkawa

Yoshi Honkawa, a nationally recognized leader in the health care industry, has retired from Chamberlain Group’s Advisory Board, effective October 1, 2016.  Yoshi plans to focus on his current board positions, and spend more time with his wife, May. “We are extremely grateful for his 26 years of service.  Yoshi was instrumental in helping us grow our hospital services offering, which is now one of our specialties,” says Mike Kiley, Founder and CEO.  “His sharp eye for unique opportunities will be missed, not to mention his warmth and ability to make everyone feel like a friend.”

A consultant in health care advocacy for Cedars-Sinai Medical Center (CSMC), Yoshi retired in 2001 from his role as Vice President for government and industry relations. Prior to CSMC, he held executive positions at the L.A. County Department of Health Services and the L.A. County-University of Southern California (USC) Medical Center.

Currently, he serves as a member of the Friends of the USC Libraries Board and is a Presidential Associate. He was previously a member of the USC Board of Associates, and has received honors from USC Price, the USC Alumni Association, USC Health Services Administration Alumni Association and USC Skull and Dagger Honor Society.  He was recently inducted into Modern Healthcare magazine’s Hall of Fame, and has garnered awards from the American Hospital Association, the California Hospital Association, the California Association of Hospitals and Health Systems, the Partners in Care Foundation and WISE Senior Services. Not bad for a 92 year old! 

We at Chamberlain Group would like to take this opportunity to thank you, Yoshi and May, for your valuable contributions to our firm.  While we are fortunate to have benefitted from your expertise, more importantly, we will always treasure you as friends. 

 

6 Tips on Year End Charity Giving

We’ve all heard the saying, “it’s more blessed to give than to receive,” but did you know this adage has been scientifically proven? In a Harvard Business School study, Michael Norton and his colleagues asked 632 Americans about their income levels, how they spent their money, and to also rate their happiness. The study concluded that regardless of income level, those who spent money on others reported greater happiness, while those who spent more on themselves did not.

Giving back to the community through stewardship is an important value held by our Founder & CEO Mike Kiley. In 2016, Chamberlain Group donated over $150,000 to local charities including Wheatstone Ministries, Augie’s Quest, Crean Lutheran School, Lux Art Institute, and many others.  The team has enjoyed volunteering their time and resources to various worthwhile causes throughout the year.  

If you’re considering a charitable donation this year, here are 6 helpful suggestions to guide your giving:

1.      Donations are tax deductible in the year they are made, by the end of December 312016. 

2.      You must claim itemized deductions on your tax return for charitable deductions.

3.      Avoid capital gains tax on investments by giving stocks or other assets that have grown in value.

4.      If you donate a car or truck, you can deduct only the amount the charity gets when it sells the vehicle.

5.      For assets other than cash, for example, cars, boats, houses, land, antiques, and paintings, the deduction documentation required is more complicated.  Contact your accountant or attorney for more details.  

6.      Before making decisions, make sure that your charities qualify for tax-exempt deductions.  Use the IRS Select Check tool, and note that churches, synagogues, temples, mosques and government agencies are eligible for tax-deductible donations, even if not in the Select Check database. 

If you’re interested in giving of your time, there are many opportunities available at your local community center, church, or you can find various options here: http://www.volunteermatch.org/. In the words of Dr. Martin Luther King, who believed that character and service to others is intimately connected, “Everybody can be great, because everyone can serve.”

We applaud your effort to give back to our community, and wish you many blessings for your generosity.  From all of us at Chamberlain Group, we wish you a very Happy Thanksgiving!

References:

Brown, Jeff.  “Year-end tax tips for charitable giving this holiday season.” cnbc.com/ December 22, 2015.

Erb, Kelly Phillips.  “12 Tips for Year End Charitable Giving.” Forbes.com/ December 17, 2011.

Randerson, James.  “The path to happiness: it is better to give than receive.” Theguardian.com/ March 20, 2008.

 

Chamberlain Group Staff Spotlight On: Tim Drake

“Tim is a valuable member of the team with a unique skill set,” says Jim McCaffrey, COO. "Here's a typical Tim story: recently a vendor presented a complicated issue to us that they themselves hadn't been able to figure out, and Tim created a solution within minutes.  They were blown away - and asked permission to utilize his solution for all of their clients!"   

Tim Drake joined Chamberlain Group in 2012 as a Performance Analyst, and is responsible for tracking investment performance, tax reporting and the design and maintenance of proprietary Chamberlain Group reports. With expertise in cash management analytics and reporting data compilation, Tim excels at project management and training staff on automated procedures that increase efficiencies and time management. Prior to Chamberlain Group, Tim served as a Senior Associate in the Portfolio Management department for global investment management firm, PIMCO.

He holds a Bachelor’s degree in International Relations and a minor in Business Administration, both from the University of San Diego.  Tim is married with two adorable young sons aged 2 years and 6 months, and enjoys mountain biking, playing soccer with his sons at the park, and family time.  Tim recently received his CFP certification, studying for the intense exam while expecting his second son.  “That’s Tim,” reveals COO Jim McCaffrey.  “He’s smart, ambitious, and a great family guy.”

 

CEO’s Corner 

A Presidential election year is always one that gives us great pause to assess the state of our country and how the new incumbent might affect our lives.  There are diverse opinions about President-elect Donald Trump’s impact on our economy, but from our perspective, we see the glass as half-full, not half-empty.

Trump has outlined an ambitious economic agenda which, over time, will help lift the U.S. economy out of its current malaise. We are pleased to see a focus on fiscal policy changes, as monetary stimulus has run its course. We applaud his intention of upending the regulatory apparatus that has stifled our business growth and strangled capital markets. The healthcare, energy and banking sectors all need help, and we believe Trump will carefully address these areas.  We also anticipate stocks to get wind in their sails, and since real estate is near and dear to his heart, this industry will probably continue to be favored.

There is one area to look out for: if Trump implements the inflationary elements of his platform, the bond market will be in for some rough sledding.  We’re keeping a very close eye on Trump’s plans, and will alert you of any opportunities for growth or areas to avoid.  Overall, we anticipate a positive shift in our economy, which is welcome news. 

During this season of gratitude, the team and I want to thank you for your trust and loyalty.  We wish you a very Happy Thanksgiving and holiday season!