240 South Pineapple Avenue, Suite 200  Sarasota, Florida  34236

You can find reports from our Investment and Research team, timely and informative financial planning topics from our Wealth Management team, and deeper dives on various important topics in our white papers from any team member. Read online, share with friends, or download for your convenience.

APA Dees 3x4HI RGBResearch Assistant Cameron Dees joined the Allegiant Private Advisors team in early 2018 and the past year has flown by, with Cameron often behind the desk at our Bloomberg terminal. We invite our clients and colleagues to get to know Cameron better as he shares his personal story:

My path to Allegiant was made possible by a heavy dose of luck and a smaller dose of making sure I was prepared when the right opportunity came along. In late 2017, after almost a year of banking experience under my belt, I was constantly thinking about how the banking environment was not the right fit for me, and how I was not even applying what I had worked so hard to learn. So in late December of 2017, I began actively searching for other positions in the Tampa Bay area. After several weeks I was discouraged with the job search and wondering if I would find the right fit, or if I would be stuck in an uninspiring career. I was almost ready to hang up the search when I received an email from a HR representative at Kerkering Barberio asking me if I was interested in applying for a role at Allegiant. Scanning over the job description, I could not believe what I was seeing: a role in Sarasota that included security analysis and hands-on portfolio management tasks as well as interacting with clients. I was sold before I ever stepped foot in the office. Once I did make it into the office for my first interview, my early excitement was confirmed. The staff was so nice and welcoming, the opposite environment that I was expecting to see at a such a reputable investment firm. After a few more interviews, and news that I had passed the first level of an important designation, the Chartered Financial Analyst® (CFA), the team at Allegiant agreed that I would be a good fit and offered me a position as Analyst on the Investment and Research team. 

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If you’re like most Americans, you are earning close to zero on deposits at the bank. Despite the fact that short-term interest rates are on the rise, most banks have left interest rates paid on deposits at record lows. As of January 2019, the average interest rate paid on savings accounts was only 0.09%, according to the FDIC. Fortunately, options are available for investors to earn significantly more interest on their savings. 

The Allegiant Private Advisors team examines five options for you to consider if you’re fed up with your savings account earning nothing. Read Allegiant’s new article published online at SarasotaMagazine.com if you are ready to ditch the bank and consider new options for income

Chart TCJA

When the Tax Cuts and Jobs Act (TCJA) was enacted in late 2017, arguably the largest beneficiaries were U.S. corporations. The TJCA cut the corporate income tax rate from 35% to 21%. This lower tax rate provided corporations with a huge one-time boost to their earnings. While no one can argue that the short-term benefits from the tax cut were very robust, the longer-term benefits are much less certain. Proponents of the TJCA argued that the tax reform would provide a meaningful boost to long-term growth, as companies would take excess earnings and invest back into their businesses via capital expenditures, thus brightening the future growth outlook. While business investment did pick up some over the last few years, we have certainly not seen an investment boom that many pundits predicted. In the chart above, the gold line represents year-over-year growth in durable goods orders which can be thought of as a proxy for business capital expenditures, while the black line shows year-over-year earnings growth of S&P 500 companies. As you can see, we did get a very strong boost to earnings growth; however, the predicted surge in business investment never materialized. Instead of accelerating investment, it appears that many businesses opted instead to return capital to shareholders via dividends and share buybacks. While dividends and buybacks help to boost short-term returns for investors, they provide little to no long-term benefit. As of today, it appears the promised long-term benefits from the TJCA have not come to fruition. 

2018 is now in the books. It was a less-than-stellar year for most investment classes. In many respects it was a tale of two markets. The first three quarters of the year were very good. Markets gained, confidence grew, and risk-on was the name of the game. In contrast, the fourth quarter marked a nearly 20% decline in the S&P 500 from peak to trough, confidence waned, and protecting capital became more important. Since bottoming on December 24th, equitymarkets have staged a nice recovery, regaining nearly half of the decline. However, increased volatility (both to the upside and downside) may not be over, at least not until some of the big issues are resolved. 

The distinction between a non-fiduciary broker and a fiduciary advisor is hugely significant, and pivots mainly around the level of care and loyalty owed to the client.  Allegiant Private Advisors chose the path of fiduciary early in our history.  

Fiduciary discussions can go down a legal rabbit hole pretty quickly, but here is a (hopefully) simple explanation of why being a fiduciary is such a core part of who we are at Allegiant.

The CFP (Certified Financial Planner) Board’s Code of Ethics and Standards of Conduct for CFP® Professionals defines fiduciary duty this way:

It is that time of year again! Your IRS tax forms will be available online and/or mailed to you over the next few months.  Online posting dates occur about five days prior to mailing dates. If you do not currently have online access and would like to take advantage of this tool, we encourage you to contact our office (941-365-3745) so we can assist you.  

Chart Two Data Sets

Most economic data come in two forms, hard data and soft data. Hard data measures actual economic performance, while soft data represents participant expectations. The chart above displays the year-over-year change in Industrial Production (the hard data), along with the ISM Manufacturing PMI (the soft data). As shown, a sharp divergence has recently emerged between the two data sets. Of note, the precipitous decline in survey data does not coincide with a concurrent decline in industrial production. This decline in expectations makes sense given current manufacturing headwinds, such as major trade disputes, a slowing housing market, a government shutdown, and numerous other geopolitical risks. However, these headwinds have yet to flow through to the actual economic data. Make no mistake, the two data sets will converge at some point. Whether they converge due to soft data rebounding or hard data declining will tell a lot about future economic activity.

For those unable to join us for Allegiant’s Quarterly Market Update at Selby Gardens on January 17, 2019, we had the pleasure of hearing a presentation from Commonwealth Financial Network’s Chief Investment Officer, Brad McMillan CFA®, CAIA, MAI. Brad is a frequent commentator on financial markets, U.S. economic policy, and the global economy for a range of media outlets, including the Wall Street Journal, CNBC, CNN International, Barron’s, and Bloomberg News. 

Brad’s presentation, entitled “Beyond the Numbers,” covered a broad range of topics. He examined recent stock market performance and the current state of, and outlook for, the U.S. economy.

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Today, balancing family obligations, career paths, and financial concerns are responsibilities often shared by those who also find themselves caring for aging parents and adult children. The Allegiant Private Advisors team examines how to manage this balancing act in a new article published online at SarasotaMagazine.com. 

Are you part of the Sandwich Generation? Click here to learn more

Chart Trucking Trends

For the past several years, trucking data has been a good indicator of the strength of U.S. economic activity. In particular, shipping volumes provide tremendous insight into both the manufacturing and industrial sectors. In a typical economic expansion, shipping volumes rise as businesses order additional supplies and send more finished products to their end markets. That trend is certainly true for much of the current economic expansion. However, shipment volume growth has weakened sharper during the second half of 2018 than previous years. This is another sign pointing to the possibility for slower U.S. growth going forward. However, slower growth does not necessarily mean no growth, or contraction. It will be important to see where shipping volumes go from here, as they are a good indicator for future economic growth.