Amundson Family adds last-minute 2018 tax exemption, welcomes Colt Alexander

Mr. and Mrs. Alex Amundson are overjoyed to announce the arrival of Colt Alexander Amundson, born at 12:05 a.m. Dec. 19, 2018, weighing in at a robust 8 pounds 4 ounces. According to Alex, Colt “enjoys long naps, shotgunning milk bottles and holding his pee so he can try and get mom and dad with it during diaper changes.”

For which we can only encourage rapid parental reflexes, continued practice, and possible use of goggles. Congratulations, Amundson Family! 

Mighty Moms helps single mothers meet extraordinary challenges

From time to time Focus 360 will include profiles of people and organizations making a difference in our community. It is not known whether those profiled approve or disapprove of Regency Investment Advisors or its advisory services provided. This article reflects the opinions of those interviewed and should not be taken as a request for you to donate to any particular organization. 

Parenting — raising the kids day in, day out — is challenging enough. You’re their provider, their nursemaid. Their counselor, their ear. Their source of make-it-better hugs and of unconditional love. Many say it’s one of life’s greatest joys while remaining a perpetual and unrelenting challenge. The world’s toughest job. 

So imagine boosting the difficulty a bit by going it alone. You’re still responsible for the kids hour-to-hour and year-to-year. But the respites you might expect from a partner never happen. Ensuring the children you love so much have their needs met is all on you. 

Now, imagine going through all of that — the rigors and extra challenges of solo parenting, of raising the kids as a single mother — when your doctor calls. That lump you found requires immediate treatment to save your life. And there’s no time to lose. 

Just imagine 

Imagine being a single mother and, suddenly, a cancer patient as well. Simply surviving becomes all you can do. Appointments, treatments, expenses; all create even greater demands upon your time and energy, and all take you away from that most sacred and joyful of duties — to be there for your children. The stakes for yourself and for your children are the highest they can be. 

How would you even get through that? 

Dr. John Burnett, a Fresno-based plastic surgeon and practitioner of post-cancer reconstructive surgeries, encountered many such women through his practice. Single mothers dealing with the dual challenges of cancer treatment and raising children. Finding that they had little in the way of organizations to support them on a journey where the stakes were even greater than life or death, Dr. Burnett decided to do something about it. He founded an organization to help those mothers, called the Mighty Moms Foundation. 

As cited on its website, the Mighty Moms Foundation “recognizes the intense financial burdens and emotional stresses single mothers must face as they undergo cancer treatments.” The Foundation identifies these mothers and their children and provides assistance in many forms, including financial help, emotional support, health and wellness, support for children, and even everyday support like child care, grocery shopping, funds or referrals for light housekeeping, and mentoring of mothers newly diagnosed. And the staff of the Mighty Moms Foundation is all volunteer. 

“Unless you’ve experienced it, it’s difficult to imagine how going through cancer treatment can impact every aspect of your life, especially as a single mother,” said Joy Hall, Clinical Director for the Mighty Moms Foundation. Hall said that for some, treatment can become so time- and resource-consuming that many single mothers undergoing treatment find that even covering the basics becomes difficult. And sometimes those basics take on extra necessity. 

A blessing beyond words

“Sometimes these moms wonder where their food will come from, or may not have the funds to cover their cell phone bills. I can’t imagine what it would be like to be in cancer treatment today and not have a cell phone,” she said. “Funding from the Mighty Moms Foundation can help with those basics, and in doing so, can help relieve the incredible burdens these moms experience.” 

So does the Foundation consider itself heroic, for stepping in and helping women facing such challenges? Not really, according to Hall. “These women are the true heroes, trying to support and nurture their families while they’re going through an incredibly difficult journey,” she said. “It’s a blessing beyond words to be able to help them.” 

To learn more about the Mighty Moms Foundation, visit their website at www.mightymomsfoundation.org, or visit them on Facebook at “Mighty Moms Foundation.”

David and Patty Bunker, Family Leadership/Parenting Partners

In “The Wizard of Oz,” the main characters went to Emerald City seeking qualities they really had all along. They just needed a little guidance to find them within.

ABCD 

Fresno-based Family Leadership, run by the husband-and-wife team of David and Patty Bunker, operates on a similar principle. The Bunkers subscribe to a theory developed at Northwestern University known as ABCD, for Asset Based Community Development. The words may sound confusing, but their meaning is simple. The right leaders to solve a community’s problems, the assets, are already in place. The Bunkers don’t just subscribe to this theory. They have put it into practice over the past 23 years, touching over 200,000 parents along the way.

David explains that in one of Fresno’s poorest communities reside many parents with considerable medical experience and skills gained in their native countries. Because these parents are unable to get licensed here, they aren’t able to offer their talents through traditional channels. But tapping into their knowledge makes a huge difference in their neighborhoods. The bottom line: parents want to get involved, and good things happen when they do.

Family Leadership brings teams of trainers to schools with poverty rates of at least 90%. It takes parents chosen by the principals and other school leaders and puts them through an intensive two-day leadership workshop, teaching them behaviors and principles they can immediately both put to work in their own households and teach to other parents

The Family That Eats Together 

Graduates of the two-day workshop then can teach other parents in weekly programs, including the cornerstone six-week course “Parenting Partners.” Other courses are available, including one being run by sponsoring schools that anyone can take online. That course, the “Family Meals Challenge,” can be found at myfamilymeals.org. It usually takes two to three hours to complete but can be done in pieces as small as five minutes at a time. The ideas behind the challenge are simple but powerful: families that have meals together eat healthier food, and their children are likelier to perform well in school and avoid developing addictions.

Positive Discipline

The concepts Family Leadership teaches are, again, simple but powerful. They involve encouragement instead of scolding, presence instead of distraction, maintaining boundaries instead of permitting arguments, and above all, the idea of positive discipline. What is that? Well, consider the typical seventh-grader and his or her new freedom, going to a number of different classes instead of a single room. Sometimes these kids think it’s ok to cut class. Instead of punishing the kids when they get caught, David suggests the following remedy: have a parent tell the child, “if you don’t make it to class, your teacher will call me and I’ll come to sit in your seat.” It works. Principals, administrators, and teachers all acknowledge that they too benefit from learning these parenting techniques. 

You may wonder why you haven’t heard of Family Leadership. That’s how David and Patty want it. They don’t want to overshadow the efforts of the parents, the real heroes. They also don’t need the publicity. In the early 2000’s they connected with Minneapolis’ Search Institute, one of the leading social-science think tanks focused on teenagers. The Search Institute helped develop manuals for Family Leadership and invited David and Patty to speak at events. Soon schools were calling, asking if Family Leadership could help.

Having started with 10 schools in the Central Valley, Family Leadership is now present on over 500 campuses. The good news: they’re hiring. 

From time to time FOCUS 360 will include profiles of people and organizations making a difference in our community. It is not known whether that profiled approve or disapprove of Regency Investment Advisors or its advisory services provided. This article reflects the opinions of those interviewed, and should not be taken as a request for you to donate to any particular organization

A New Delivery System

In 2020, Regency will improve its client experience by using the client portal for electronic delivery of regulatory documents, updates, and quarterly performance reports. This will allow clients 24/7 access to current performance and historical statements. In the coming months, Regency will mail login instructions to clients who don’t already use the portal.

All accounts in your household will be accessible with the same username and password. Regency’s Client Service Team is available if you have any questions about this enhancement. Simply call 559-438-2640, Monday through Friday, 8:00 a.m. to 5:00 p.m., and ask for Allison. If you previously signed up but never activated the electronic portal, contact the Client Service Team and a welcome email, with an activation link good for 48 hours, will be sent to you.

Regency Market Commentary: Through October 31, 2019

Since we last wrote to you, a lot has been going on. If you can give us a few minutes, we’ll do our best to fill you in. In spite of seemingly endless concerns—which we will briefly review momentarily—markets have been generally strong, although there have been some uncomfortable stretches.

The short story: the market’s rally continued since the end of April, though its pace slowed considerably and it had a number of up-and-down swings. The S&P 500 is now up over 23% year-to-date through the end of October, making up for the painful correction in late 2018. Most of this year’s gain came in the first several months, but the S&P did pick up slightly better than 4% since the end of April. The Dow Jones was about one percentage point behind the S&P for the period, while the small-cap Russell 2000 actually fell back about a percentage point since our last letter. Large-cap international stocks benefited, gaining about 4% since our last letter to be up nearly 19% on the year. 

Perhaps more eye-catching was the movement in bonds. The 10-year US Treasury, which was paying 2.50% in April, dropped all the way to 1.69% by the end of October, and was even lower briefly in August. That translates to a 6% price gain in bonds in a matter of months, a fairly remarkable occurrence. (We’ll get to the dreaded inverted yield curve in a few moments.) The Federal Reserve has cut rates not once, not twice, but three times (in July, September, and October) since we last met, trying to provide insurance against a possible recession, and perhaps acting, however reluctantly, in response to President Trump’s criticism of its relatively high rates. As we write its target range is 1.50% to 1.75%. 

We note that inflation did pick up recently, exceeding the rate available on short-dated Treasury bills. It’s a bit unusual to see that in conjunction with a bond rally—just one of the strange events that has taken place over the late spring, summer, and early fall. 

Across the country in New England, they say that if you don’t like the weather, just wait an hour. In the markets of late, if you don’t like the action, just wait a month…or a week…or a day. As we so often see, this argues for a patient, long-term plan.

Let’s start with probably the biggest overall market influencer, the ongoing trade war with China. In July, it seemed that a deal was near, and markets acted accordingly, making new highs. But in early August, President Trump announced new tariffs, and on the morning of August 23rd, he went a step further, increasing tariffs and ordering “great American companies to look for alternatives to China.” Gold, notably, rose by 2% that day, while major equity markets went about that much in the other direction.

It didn’t take long for the Chinese news to turn, at least somewhat. On August 30th, China said it wouldn’t retaliate (at least not initially) for the increased tariffs. By mid-October, there was talk of a first-stage settlement of the trade war, and while many analysts were skeptical, the market reacted favorably. 

The US trade war is not the only Chinese concern. The ongoing protests and riots (you choose the term) in Hong Kong have already started a recession there, with potential for broader implications. And, keeping focused on Asia for the moment, India’s economy and markets have struggled enough over the past three years. The government in late September announced a major tax cut, at least momentarily turning markets higher. 

It’s clear that investors are paying up for “safety” in Europe, while companies don’t seem eager to borrow for new projects. Negative rates make traditional saving far more difficult, and they have the perverse effect of allowing “zombie” companies that probably should shut down to keep going. Not surprisingly, the Euro hit its lowest level versus the dollar—less than 1.10—since May 2017. 

A trip across the English Channel takes us to the Brexit saga. Skeptics have long wondered whether the UK will ever really leave, but it’s almost the literal definition of uncharted territory. 

Enough about the overseas concerns. What about here in the States? We got a big scare in August when the yield curve inverted, with 10-year Treasuries paying less than 2-year ones. While it may sound odd that borrowing money for a much longer time is cheaper than in the near term (and it is), it’s certainly not as odd as negative rates, which we thankfully don’t have. But after a favorable purchasing manager’s report in late August and an October “Goldilocks” employment number, not too hot, not too cool, the curve recovered its normal shape in September. 

Still, why were we hearing so much about the inverted yield curve? Here’s a very brief lesson. Historically, inverted yield curves (the name comes from the downhill slope on an interest-rate graph, with rates on the y-axis and time on the x-axis) have been reliable predictors of a recession, though the timing has varied considerably. 

More importantly, remember that good financial practice involves matching assets and liabilities. That means you should pay for long-term projects with long-term financing (just as most people take long-dated mortgages when they buy houses). When 10-year rates are lower than 2-year rates, it suggests companies are eager to neither borrow or build.

Finally, put yourself in the position of a bank. Banks borrow short-term money and lend it long-term. If it generally costs them more to borrow than they can make from lending, they’re likely to cut back on their activity, thus slowing the wheels on which the economy turns. So inverted curves are uncommon, and they can be a bit scary. 

What did we leave out? All kinds of US political activity, including an impeachment inquiry, the abandonment of a former ally in Syria, and frightening diplomacy with Iran. Oil briefly spiked 12% when a drone, reportedly launched or at least permitted by Iran, took out half of Saudi Arabia’s oil production capacity, though it fell back in a matter of days. Over the period since April’s close, oil took it on the chin, falling nearly 18% to just over $54. Gold had a big run since April, gaining over 15% to $1,512. 

The bottom line: as we said initially, the ups and downs of recent months are yet more evidence of the importance of sticking with a long-term plan, subject to periodic rebalancing. Even—perhaps especially—some of the most volatile periods generally reward investors who maintain such plans. 

Questions? Call your Regency advisor at (559) 438-2640.

Dissatisfied with your tax outcome? The best available time to plan for next year is right now.

It’s been said that the best time to plan for tomorrow is last year. And for many, despite the best of intentions and plans in place, the first tax season in the wake of the Tax Cuts and Jobs Act of 2017 turned into a surprise, positive for some, and less than positive for others. 

“We’ve all seen the headlines about how many came away surprised by the effects of tax reform. Some were surprised positively, and others may have experienced effects outside of their goals,” said Elizabeth Muñoz, MBA, AIF®, and Retirement Plan Advisor at Regency Investment Advisors. “While the best time to plan might have been last year, the second-best time to plan is right now. For many, plenty of options remain for minimizing the impact of taxes next year.” 

While Regency does not do tax planning — that’s always a job best left to your accountant — we do understand a lot about tax management and the role it plays in reaching your long-term financial goals. With that in mind, we’re aware of several elements that can have a positive effect on your tax picture for next year, including the following: 

Retirement savings can present opportunities 

If you’re covered by a 401(k) or another company-sponsored retirement plan, consider increasing your contributions in 2019 to reduce your taxable income. “Tax reform increased contribution limits on company-sponsored retirement plans, to $19,000 annually for individuals and $25,000 annually for those over 50,” Elizabeth said. “Also, boosting your IRA contribution to the full $6,000 annually for individuals can reduce your tax bill next April.” 

Reconsider your current tax withholding 

Many taxpayers have a habit of over-withholding, presuming they will receive a larger refund during the next year if they do so. But for some, that anticipated refund did not materialize, and for others, they incurred a tax bill anyway. “Tax reform brought about major changes in tax rates, standard deductions, and personal exemptions. For many, the old assumptions about refunds simply no longer apply,” Elizabeth said. “Now may be a good time to reconsider your withholding. Don’t over-withhold, and instead consider putting that money to work for you in the here and now.” 

Give strategically 

For many, the higher standardized deductions of tax reform affected the deductibility of their past charitable contributions. Under tax reform, it may be worth considering new strategies to maximize both the benefit to the charity and the benefit to your tax picture. 

“We’re aware of several strategies that allow investors to donate strategically, to continue the giving that’s so important to the causes they support while taking advantage of deductibility,” Elizabeth said. “Strategies like ‘bunching,’ which under certain circumstances, allows donors to bunch two or more years’ charitable giving into a single tax year. Or use of Donor Advised Funds, which may allow an investor to qualify for an immediate tax deduction and then recommend grants from the fund over time.” 

The one constant throughout all of this? “Change, of course,” Elizabeth said. “Change requires adaptability, and adaptability requires a combination of excellent planning and flexibility. Helping our clients adapt to change, and maximizing the opportunities available are the reasons we’re here. And we’re only too happy to help our clients navigate change.” 

Have questions about how these and other strategies could help you maximize the benefits of tax reform? Call your Regency advisor at 438-2640 today.

Hot Topics: Bonds are back

With stocks knocking it out of the ballpark lately (except for the fourth quarter of 2018), my perception is that people have kind of forgotten about bonds. When it comes to Hot Topics, it seems like bonds aren’t even part of the conversation anymore. 

And that’s a shame, because in terms of total returns, bonds are one of the unsung heroes in mixed portfolios right now. 

Historically, bonds typically do not generate the high returns stocks are capable of generating. But that’s okay, because bond investments typically aren’t intended to grow an investor’s money. Instead, they’re an insurance policy in a diversified portfolio, reducing the risk in a portfolio and providing investors with diversification, guarding against declines in equities. 

So it makes sense that bonds would show anemic returns during an equity bull market. According to Steve Guinn the Barclay’s US Aggregate Index which tracks their performance, bonds generated a 0.5 percent total return in 2015, a 2.5 percent return for all of 2016, a 3.5 percent return for all of 2017, and an underwhelming 0 percent return in 2018. No wonder investors stopped thinking about them. 

But so far in 2019, bonds are off to a good start, up about 2.9 percent in total return, from the beginning of the year through mid-April according to the same Barclay’s US Aggregate index. That’s a solid improvement over the last few years, generated in a little over three months. Why are they suddenly generating returns? When interest rates go up, bond prices typically go down, which can actually reduce their total return. But right now, investors with mixed portfolios are experiencing the opposite, where bonds as an asset class are doing more than just reducing risk. They’re actually adding to the returns, giving investors a bit of a breather from equities volatility while generating higher total returns. For investors, it’s a little unusual to have both sides of the portfolio generating solid returns. 

Bonds definitely have their place in the conversation. Have questions about how bonds might fit in your portfolio? Contact your Regency advisor today.

Regency Market Commentary: Through April 30, 2019

After 2008, plenty of pundits and prognosticators began to speculate whether the ultra-low inflation and near-zero interest rates at that time somehow represented a “new normal,” a change to the fundamentals of the economy. With the long-expected rise in interest rates, the return of modest inflation, and continued economic growth, it appears the economy may be on the road to returning to the “old normal” those pundits may have forgotten about during the recovery. 

Similarly, investors likely remember the near lack of volatility in equities throughout 2017, with many “experts” seizing upon that lack of volatility as evidence of a “new normal” in the equity markets. But in previous commentaries, we’ve explored how the almost eerie calm of 2017 was the outlier and did not represent a “new normal.” 

The absence of volatility in 2017 may have lulled some investors and pundits perhaps into a false sense of security about market behavior. In the first quarter of 2019, the S&P 500 has experienced 28 days of returns falling or rising by at least 1 percent. In 2017, the S&P 500 experienced only eight such days all year. That’s atypical. 

Returns outpacing expectations 

The good news? Despite the volatility, returns have outpaced expectations so far this year. The S&P 500 has been positive for the year so far, and bonds — while not reaching the stellar returns of equities — have also provided positive returns to portfolios. 

The concerns heard about “cracks in the economy” that many pundits spoke of over the last few months seem to have evaporated; instead, most portfolio managers today are expressing belief that the economy still has room to grow, citing as evidence March’s 3.8 percent unemployment rate, 196k jobs added to the economy in March, rebounding retail sales and a high level of consumer confidence. 

Even foreign stock markets have been mostly positive, although they have struggled to recover as much as domestic markets. The German economy — recognized by many as the driving force of the European economy — has shown signs of slowing down as the manufacturing sector has struggled. 

There’s no denying that the Fourth Quarter of 2018 was rough, pulling back nearly 20 percent from market highs reached in September 2018. But after that pullback, the market has experienced a strong recovery. Corporate earnings have been good, with earnings growth forecast in the 10-12 percent range for 2019. Geopolitical issues like the lingering saga of Brexit and the possibility of trade and tariff conflicts with China leave the markets with no clear sense of direction in the short term. 

Seeking clarity, direction 

No one has a crystal ball, and no one knows where the markets will be going over the short-term. As the markets gain clarity on some of the geopolitical issues creating uncertainty, economies will continue to grow, and companies adapt to their environment. This process can create volatility in the short term. 

But in the end, whether it’s a “new normal” or an old one, Regency’s message remains the same: The key is to be in a diversified portfolio where you’re comfortable with the volatility, and remain focused on the long term. 

Whether it’s a bumpy road or a roller coaster ride, those ups and downs of volatility tend to even out in the long term. If you’re in a diversified portfolio and comfortable with the volatility, the key may be to hang tight and just enjoy the ride.

FOCUS 360 Disclosure

Past performance is not indicative of future results, and inherent in any investment in the market is a possibility of loss. There are inherent limitations in making assumptions due to the cyclical nature of the market. 

Regency’s Kelly Carey: Friendly competition, with a smile

Regency’s Kelly Carey loved growing up in Fresno. Like many, she thought about going out of town for college, seeing what other options might be out there. But in the end, Kelly decided staying in Fresno and attending Fresno State were her best choices. 

“I figured I could always explore other opportunities after graduation,” Kelly recalled. “But I soon realized the opportunities offered with Regency would keep me in town. And I’m so happy I stayed.” 

Regency is happy she stayed, too, hiring her back in 2015 as our receptionist. Today, just four years later and after handling all account administration and service-related issues as our Administrative Director, Kelly has earned another promotion. This month, Kelly takes on the role of Regency’s Human Resources Director, taking on responsibilities for hiring, new hire training, and much more. 

Not bad for someone who took on Regency as her first job just four years ago. 

A memorable interview 

“I remember my first Regency interview, with Marci Deck, when she told me Regency was her first job at 19. But there I was, looking at an owner across from me — a woman owner — and I couldn’t help but to see a little of myself in that,” Kelly said. “ I wanted to achieve something similar in my own career, and I knew then Regency was where I wanted to be. It was the quality of the people here. I knew immediately they were a great team, and I could see myself here long term.” 

So what abilities allow someone to take on an opportunity like that with such success? We’ve found that Kelly has a drive, a competitive nature, that allows her to meet any challenge coming her way while moving the whole team forward and finishing with a smile.

And where does she believe this ability came from? “Sports,” she said. 

“I’ve played sports my entire life, first at St. Anthony’s, then San Joaquin Memorial, where I played basketball and volleyball and was team captain all four years,” Kelly recalled. Kelly cited an important lesson she took away from all of those sports. “On the court it’s never about you; you can’t do it without the people around you. I’ve tried to bring that lesson into my professional career, too. Regency works as a team for the best interest of our clients, assisting one another every step along the way.” 

Kelly brought that team spirit to Regency after graduating from Fresno State with a BS in Business Administration. She was also part of the Delta Gamma Sorority, where she participated in community service work, and where she was recognized with the Friendship Award voted on by the entire chapter during her senior year. “It was an honor to be recognized by my peers and the perfect ending to my college days”, she said. 

Kelly believes in the value of hard work, and in finding ways to not only stay motivated, but in motivating the people around her. But that does not represent a win-at-all-costs approach. “I’m competitive, but in a good way,” she said. “I’m a quiet leader, I try to live by the golden rule, to treat others the way I want to be treated, and I believe that in my work life, personal life, every aspect. I like to think I’m as dedicated as they come, but it’s friendly competition, to better yourself and the people around you.” 

The big picture

 In her off-hours, Kelly enjoys time with family and friends, running, hiking in the foothills around Fresno, and following around Kayla, her 80-pound yellow lab, on many such journeys around the area. “When I’m not in Fresno, you can find me visiting my brother, sister, brother-in-law and the new family favorite, my 2-month-old niece Harper in Monterey,” she said. “I adore taking Kayla to Carmel Beach and watch her run, play and swim in the ocean.” 

When Kelly considers the big picture, it’s no great leap to say it’s all about balance. While Regency can attest that Kelly greets every day with a smile, Kelly says exactly the same about Kayla. “She just loves life, and greets everything with a wagging tail and a smile. She never has a bad day,” Kelly said. “I think that’s a great approach to life.”