investor resources

River Wealth Advisors' Currents Newsletter

 

The advisors at River Wealth are committed to enriching investors by sharing their insights and understanding of the market by regularly publishing the quarterly Currents Newsletter.

INSIDE THIS ISSUE - SEPTEMBER 2018

Market Commentary - Second Quarter 2018
Client Services Beyond Investing
Young Professionals’ Choices in Day-to-Day Spending Can Impact Financial Future 
River Wealth Advisors Named Readers’ Choice
Chuck Domer and Andrew O’Gorman Join River Wealth Advisors


Market Commentary - Second Quarter 2018

Domestic financial markets expanded modestly during the second quarter of the year, while broad international markets reclaimed some of the ground they lost during the first quarter. The persistent news regarding the escalation of trade tension and its potential economic impact has kept markets jittery. Nevertheless, domestic economic indicators remain positive, and the Federal Reserve appears steadfast in its plan to normalize (raise) short-term rates. In addition, in the early stages of earnings reporting season, the majority of reports have been positive, with upside surprises.    

Global Economic Conditions

Clouds have rolled in recently over the global economic situation. Any progress in North Korea has been offset by increased trade friction. The implications, thus far, have primarily surfaced in foreign equity and currency markets. Losses in international equities, which are partially a function of an appreciating U.S. dollar, have also been fueled by declining market sentiment, as investors remain concerned about the outcome of trade discussions.  

Corporate Earnings

Corporate earnings growth has accelerated, largely boosted by the recent U.S. tax overhaul, which significantly reduced corporate tax rates. Expectations for 2018 remain optimistic as analysts project double- digit earnings growth to continue. Thus far, the majority of companies reporting second quarter earnings have provided shareholders with positive reports. Improved earnings numbers have kept fundamental valuation measures steady, giving the market room to expand.  

Domestic Policy Activity

Leading up to the November elections, it does not appear that any policy activity will occur domestically with the capacity to materially impact financial markets. 

Central Bank Activity, Rates and Inflation

The Federal Reserve is on track to increase short-term interest rates four times this year. Despite an expanding economic and employment situation, rates remain relatively low, and modest inflation numbers have given the Fed room to act gradually. There is a widely held expectation that rate increases will continue over the next few years.

Financial market conditions have become considerably more volatile this year, and we are starting to see divergent returns across different investment asset classes. Although it has been a while since we last observed a divergence of returns, it is a fairly normal condition over relatively short time periods. From a longer-term perspective, asset returns are more consistent with risk. We encourage you to remain focused on long-term objectives.  

Geopolitical Concerns

As has been the case for some time, underlying what seems to be a fundamentally sound economic situation is the specter of geopolitical events. Most recently, trade policy and military conflict. While a true trade war would indeed be economically disruptive, all we have seen so far is talk, not policy. Likewise, recent military action in Syria and potential conflicts elsewhere may result in short-term market reactions. Unless these become protracted military campaigns, history indicates that their market impact will be short-lived. 

With volatility back in financial markets, being driven by minute-by-minute news flow, it is important to keep things in perspective, and recall that uncertainty and volatility are normal parts of investing and functioning markets. As always, we encourage you to remain focused on long-term objectives. 

 

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Client Services Beyond Investing

By Ed O’Gorman

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Here at River Wealth Advisors, we love what we do. Our work provides us with daily opportunities to help clients clear away the uncertainty involved with financial decisions and move forward in their lives with confidence. Much of our work is focused on the development of portfolio objectives and the oversight of investment strategy, helping clients marry their goals and objectives with their resources. Portfolio management and planning are critically important components of our day, but our job does not end there.

We are frequently called upon as a resource to assist in decisions beyond investment management and strategy. Clients facing life decisions with financial implications seek our assistance, and we are happy to help. Our ability to help clients make sound decisions is incredibly rewarding to us, and it’s a big part of the value we offer.   

Recently a client decided to purchase a home outside the U.S. They felt this would be a great move, but needed help figuring out how the financing worked. After discussing the transaction in detail, we were able to map out a strategy to efficiently finance their dream home. Another client reached out for advice on how to use his IRA to invest in the closely held stock of his new employer. With the help of our custodial partners we successfully coordinated this transaction for him. 

In addition, we spend time collaborating with our clients’ attorneys and CPAs to develop tax and estate plans. After discovering issues through the financial planning process, we recently met with our clients and their attorney to update their testamentary documents. Clients transitioning from working life to retirement often have an opportunity to manage their tax exposure. By collaborating with our clients’ tax professionals, we are able to identify these opportunities and put tax-saving strategies in place.

Unfortunately, there are times when life throws a client a curveball. Serious medical conditions, the loss of a loved one, divorce or significant unexpected expenses can create significant financial stress in a person’s life. We are ready to step into these situations and help clients bring order to the chaos.  

If you are facing a financial decision, we are here to help. Situations can vary widely, but chances are we have worked through similar scenarios. If it is outside our area of expertise, we will help bring in the resources needed to make prudent decisions. Our goal is to be your trusted source for comprehensive financial advice in all aspects of life. What can we do for you and your family today? 
 


Young Professionals’ Choices in Day-to-Day Spending Can Impact Financial Future

Spending index research conducted by Princeton Survey Research Associates revealed that young professionals are spending significantly more than their elders in four of the six categories examined in the survey.

The survey confirmed that many adults in the 22 to 37 age group were falling victim to common daily spending vices that can lead to larger financial struggles. Already faced with the largest student loan debt of any generation and housing costs that exceed the long-held standard of 30 percent of their income, young professionals are sometimes hard pressed to make ends meet.

All told, this age group spends an additional 15 percent, or over $2,300 per year more, when compared to other generations. According to an annual financial index,[1] eating out is the number one item that Americans spend their money on, with 24 percent of the family budget being dedicated to restaurants. This is true for every age group, with the young professionals’ weekly tab for eating in restaurants or getting takeout averaging $233 a month. An average of $53 a week is spent on eating lunch at restaurants.

A crucial step in making sure that young professionals start off building a sound foundation for their financial future is developing a plan and establishing investment goals. Balancing immediate wants (e.g., eating dinner out) with long-term benefits, like retiring early, can help guide day-to-day financial choices.    

A good way to get a better understanding of where the money goes is to keep track of every expenditure during one month. Seeing the total figures will help you assess where to economize so money can be redirected toward investing. 

At River Wealth Advisors, we understand that on-the-go young professionals want instant access to the details of their investment portfolio and/or financial plan. We have the technology to accommodate you via our online portal, which gives you instant access to your portfolio and the financial planning tool MoneyGuidePro®.  Through the planning tool, you are able to create a budget, track your goals, create and update your financial plan, and actively adjust your investment goals. Another feature available to you, “The Play Zone,” allows you to virtually try out unlimited combinations of options, testing each one to see how it impacts the probability of the plan’s success. Talk with us about getting started.

 

Spending Index, July 6-9, 2017, conducted by Princeton Survey Research Associates International. Telephone interviews with a nationally representative sample of 1,002 adults living in the continental United States. The margin of sampling error for the complete set of weighted data is plus or minus 3.9 percentage points. [1] Financial Well-Being Index: American Workers was conducted online within the United States by Harris Poll, December 2016.
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Average Annual Spending by Age Group

River Wealth Advisors Named Readers’ Choice

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River Wealth Advisors has been honored as the 2018 Readers’ Choice for Financial Planner by Harrisburg Magazine. Every year, the readers of Harrisburg Magazine vote for their favorite businesses in categories including restaurants, service providers, destinations and many others. Over 175,000 votes were cast during this year’s selection process.

“We appreciate the support from the community and are proud to be recognized as Readers’ Choice for Financial Planner,” said Robert Caplan, CEO of River Wealth Advisors. “We continually strive to provide our clients with personalized financial strategies to guide them through all their life phases.”


Chuck Domer and Andrew O’Gorman Join River Wealth Advisors

Chuck Domer

Chuck Domer, Chief Compliance Officer & Director of Operations

In his new role with the financial advisory, Mr. Domer will oversee the firm’s day-to-day operations and ensure compliance with the ever-changing regulations of the securities industry. He attended Penn State University, served in the United States Marine Corp and holds the Series 66 license. 
 

Andrew O’Gorman

Andrew O’Gorman, Portfolio Administrator

In his role, Mr. O’Gorman will collaborate with the firm’s investment advisors to deliver exceptional client service, maintain client objectives within portfolios and manage trades for clients’ accounts. He graduated from Mercyhurst University Walker School of Business.


IMPORTANT DISCLOSURE: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by River Wealth Advisors LLC [“River Wealth”]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from River Wealth. Please remember to contact River Wealth, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or modify any reasonable restrictions to our investment advisory services. River Wealth is neither a law firm nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of River Wealth’s current written disclosure brochure discussing our advisory services and fees continues to remain available upon request or at www.RiverWealthAdvisors.com.