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Using Data to Revolutionize Medicine
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Old Dog, New Trick: The Power of Adult Learning PLUS Keeping Your Money Safe When You Travel Shining a Light on Mental Illness Hooked on Fly Fishing The Productivity Conundrum
FALL 2016
At CAPTRUST, we believe we have a profound responsibility to share our success with those less fortunate than us. One way we do that is through the activities of the CAPCommunity Foundation, our in-house, employee-run charitable foundation. Its mission is to enrich the lives of children in communities we serve. The foundation, a registered 501(c)(3) charity, was formally organized in 2007 to provide our employees with opportunities to participate as a group in community outreach efforts and to offer their time, passion, and financial support as a way to give back.
“When we give cheerfully and accept gratefully, everyone is blessed.” – Maya Angelou
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www.capcommunityfoundation.org | toll free: 855.649.0943 4208 Six Forks Road, Suite 1700 | Raleigh, NC 27609
Volume 2, Issue 3 | Fall 2016
It’s hard to believe the year is almost over. While 2016 started off with a swoon in the U.S. stock market, things have finally settled down, and we are now enjoying a solid year for our investors. I hope the upcoming holiday season provides you with an opportunity to relax and spend time with family and friends. The cover of our fall issue highlights Dr. John Q. Walker, the hero profiled in our Second Act feature. Walker, a former IBMer and serial technology entrepreneur, has transitioned into a new role using his deep knowledge of computing to revolutionize the practice of medicine by removing the guesswork from patient diagnosis.
In addition, this issue’s features and columns explore a range of topics, including: • Keeping your money safe when traveling abroad and avoiding unwanted fees, • How couples can start a dialogue about their expectations for retirement, • The story of a family legacy that funds mental illness research, and • Getting hooked on fly fishing as a way to commune with nature. Regular VESTED contributor Kim Painter penned this issue’s must-read feature on the challenges and rewards of later-in-life learning. She examines the science of adult learning and the beneficial effects of learning at any age. And finally, this issue’s Investment Strategy features our Investment Committee’s thinking on productivity in the U.S. and other developed economies and why it’s on the minds of investors, academics, and policy makers. As always, the goal of VESTED is to provide you with timely, relevant, and actionable ideas and recommendations. Please help by sharing your thoughts, reactions, and story ideas with us at VESTEDmagazine@ captrustadvisors.com.
CEO Fielding Miller shares the stage with Senior Director Scott Matheson at a recent company event.
I hope you enjoy reading this issue. All the best,
J. FIELDING MILLER CAPTRUST Chief Executive Officer
PUBLISHER J. Fielding Miller Chief Executive Officer
EDITORS John Curry Editor in Chief
Jennifer Liebel Managing Editor
EDITORIAL ADVISORY BOARD Jeremy Altfeder Client Relationship Manager
Karen Denise Senior Manager, Wealth Operations
Rush Benton Senior Director, Strategic Wealth
Mike Gray Senior Vice President, Financial Advisor
Hugh (Trae) Cole Financial Advisor
Land Hite Senior Vice President, Financial Advisor
Ellen Crowley Vice President, Financial Advisor
Aaron J. Morris Vice President, Financial Advisor
Nick DeCenso Manager, Wealth Strategy
Mark Paccione Director, Investment Research
Teri Parker Vice President, Financial Advisor
ART DIRECTION & MARKETING Jessica Rose Art Director Jennifer Mastrapasqua Promotion Manager
Greg Middleton Production Manager
Lonzetta Allen Designer
Colby Warren Senior Designer
WITH THE ASSISTANCE OF Azul Photography Raleigh, NC
Classic Graphics Morrisville, NC
800.216.0645 | www.captrustadvisors.com 4208 Six Forks Road, Suite 1700 Raleigh, NC 27609
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kathleen burns kingsbury
nanci hellmich
kim painter
Kathleen Burns Kingsbury is a wealth psychology expert, founder of KBK Wealth Connection, host of the Breaking Money Silence™ podcast, and the author of several books, including How to Give Financial Advice to Women and How to Give Financial Advice to Couples. Her next book, Breaking Money Silence: Shatter Money Taboos by Helping Your Clients Openly Discuss Their Finances, will be published in 2017. For more information, visit www.kbkwealthconnection.com.
Nanci Hellmich, an award-winning multimedia reporter, covered personal finance, retirement, nutrition, health, and other topics for USA TODAY for more than 30 years. She now enjoys writing for AARP, Encore.org, and other companies and organizations. She has been named one of the top 10 national online influencers on weight loss and nutrition. Nanci has appeared on both local and national television shows, including NBC’s TODAY Show.
Kim Painter is a freelance writer specializing in health and lifestyle issues. She was a USA TODAY staffer for many years and has continued to contribute to the newspaper as a reporter, columnist, and blogger. She lives in McLean, Virginia, where she practices what she preaches: wearing sunscreen, eating broccoli, and getting at least 10,000 steps a day.
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Features 4
KEEPING YOUR MONEY SAFE WHEN YOU TRAVEL
by Gabi and Skip Yetter
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USING DATA TO REVOLUTIONIZE MEDICINE
by Constantine von Hoffman
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OLD DOG, NEW TRICK: The Power of Adult Learning by Kim Painter
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Columns 15 22
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GLEANINGS
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LASTING LEGACY
Shining a Light on Mental Illness by Nanci Hellmich
MARKET REWIND
MONEY TALKS
The Time to Talk About Retirement Is Now by Kathleen Burns Kingsbury
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CLIENT CONVERSATIONS
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CAPTRUST HAPPENINGS
PASSION PURSUITS
Hooked on Fly Fishing by Nanci Hellmich
THE PRODUCTIVITY CONUNDRUM
frank (skip) yetter
gabrielle (gabi) yetter
constantine von hoffman
Frank (Skip) Yetter is a Massachusetts native, media professional, emerging chef, and avid traveler. He was senior vice president of global sales for Business Wire until he and his wife, Gabrielle, sold their Boston home in 2010 and gave away most of their possessions, relocating to Cambodia to volunteer, travel, and write. Skip consulted for NGOs and businesses in Phnom Penh and published KISS Kooking: Simple Meals, Simple Cooking for Simple Kitchens (and Simple Minds). His first novel, Rilertown, was published in September.
Gabrielle (Gabi) Yetter is former journalist who worked on the South African Star before moving to the U.S. to work in public relations and business development. Since relocating to Cambodia with her husband, Skip, she has written three books: The Definitive Guide to Moving to Southeast Asia: Cambodia; The Sweet Taste of Cambodia; and Ogden, The Fish Who Couldn’t Swim Straight, her first children’s book. She co-authored JUST GO! Leave the Treadmill for a World of Adventure with Skip.
Constantine von Hoffman is a business and financial writer. For the past 25 years, he has worked for CBS News, Inc. Magazine, and The Boston Herald, among other news outlets. His writing has appeared in many publications, including the Harvard Business Review, Sierra Magazine, and The Boston Globe.
All publication rights reserved. None of the material in this publication may be reproduced in any form without the express written permission of CAPTRUST: 919.870.6822. ©2016 CAPTRUST Financial Advisors. The opinions expressed in this report are subject to change without notice. This material has been prepared or is distributed solely for informational purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. CAPTRUST does not render legal, accounting, or tax advice. If you require such advice, you should contact the appropriate legal, accounting, or tax advisor. The information and statistics in this report are from sources believed to be reliable but are not warranted by CAPTRUST Financial Advisors to be accurate or complete. Performance data depicts historical performance and is not meant to predict future results.
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KEEPING YOUR MONEY SAFE WHEN YOU TRAVEL by gabi and skip yetter
It was 9 p.m. on a Tuesday in London’s Streatham Hill district. We’d just had dinner and were flying to Cambodia the following morning, so we needed cash. Spotting a Sainsbury’s ATM on the way to our car, we popped in our card and waited. No cash. Even worse, no card. The ATM had devoured it.
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It wasn’t the first time we’d had a cash emergency on the road, so we were prepared to handle it. We phoned our financial advisor in the U.S., arranged for him to send us a new card in Phnom Penh, and used another to withdraw cash until the new one arrived. Each time something like this happens (and there have been several times), we remember the importance of a backup plan. And in our six-plus years on the road, we’ve learned lessons that have served us well. Dealing with money is an important facet of international travel: how to carry it, where to withdraw it, how to get the best exchange rate, and what to do when you have an emergency. We left our home in the U.S. in 2010 to volunteer in Cambodia and, while we spent a great deal of time preparing for most things, we discovered there’s nothing like experience to make you figure it out. Since leaving Cambodia three years ago, we’ve been house-sitting in Europe and Central and South America, exploring other countries that appealed to us, and writing about our experiences (mostly in our book, JUST GO! Leave the Treadmill for a World of Adventure). While our journeys have opened up worlds of adventure, not all our experiences have been good. But they’ve all been memorable.
So, rule number one is this: Bring more than one credit card, and make sure you have a little cash. Rule number two: protect your cards, cash, and valuables.
Last year in Morocco, we were traveling through a remote part of the country with a guide when we discovered our ATM cards had expired, and we were short on local currency. Our hotel accepted only cash, and our guide’s one and only credit card machine was miles away in Casablanca. As a result, our last two hours in the country were spent dashing through the streets of Marrakech in search of a cash machine that would accept our other card, getting lost in the Medina’s mazelike streets, and almost missing our flight.
So, rule number one is this: Bring more than one credit card, and make sure you have a little cash. Rule number two: protect your cards, cash, and valuables. The days of traveler’s checks are fading fast, and while cash machines spew local currency in almost every country, it’s important to have ready cash when you land in case there isn’t an ATM at the airport, the ATM is broken, or you need a cup of coffee or taxi fare as soon as you land. As one of our friends discovered when he visited us in France, local currency is required at toll booths, so you might find yourself stuck (or, in his case, at the mercy of a kind Frenchman) if you have only U.S. dollars or a credit card. Continued on page 6
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Here are some things to consider when you travel overseas: Advance planning. Inform your credit card company and financial advisor of your plans. If you’re going on an extended trip, make a plan for emergency fund transfers in case your wallet goes missing. Check how your credit card company fraud alert service works. Ours has an excellent email notification service and 24-hour toll-free service that has come in handy. Once, after detecting a pattern of sketchy purchases while we were traveling in India, they instituted a fraud hold until we could verify the purchases. Unfortunately, our card was rejected when we checked into a hotel in Udaipur, so we put an urgent plea for help on our credit card company’s Facebook customer service page. Within hours, our account was back in business. (Tip: Use Facebook and Twitter for urgent communication to organizations you need to reach. They will generally respond faster than if you contact them by email.) ATM access. The global financial network gives you instant access to your money no matter where you are, but there are still places with little or no ATM access. Don’t assume that hotels and restaurants accept credit cards. Check in advance, and plan for surprises. We have encountered several hotels and restaurants whose websites say they accept credit cards but, for one reason or another, cannot or do not accept plastic when we arrive. If you have a problem, it helps to work with a financial advisor or bank that will go the extra mile to give you back your liquidity. Stay away from ATMs that are not connected to banks (like the one outside Sainsbury’s in England that ate our card). A second card or credit card that will double as a cash source is also important. Currency exchange. Companies like Travelex are conveniently located in airports, but their currency exchange rates are generally unfavorable, and they often charge exchange fees, so don’t exchange much cash at the airport. Instead, find an ATM at the airport or wait until you get to a bank, post office, or American Express office — or ask your taxi driver to take you to a bank ATM on the way to your destination. Avoid the change bureaus you see in touristy areas.
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WONDERING WHERE TO GO? When we look for places to visit, we base our decisions on several things — where we are departing from, what appeals to us, and where we’ll get good value for our travel budget. We also find there are places — such as South Africa, Central America, and much of Southeast Asia — where you get a good bang for your buck so that upgrades for flights, hotels, and car rentals are more affordable. Our top destinations for low cost of living and either dollarized economies or favorable exchange rates include Cambodia, Vietnam, Thailand, Peru, Turkey, Greece, Serbia, Bosnia-Herzegovina, Croatia, and South Africa. At the time of this writing, you’ll also find the UK on the list of places where your dollar will go further. Since the Brexit vote in May, the pound isn’t doing well, so a trip to London will cost you noticeably less than in recent years.
They, too, usually offer poor exchange rates. When exchanging cash or traveler’s checks, it’s usually best to exchange your money in the country you are traveling to, not in the U.S. Avoid black markets, which are easy to find in many countries, but may be operated by dubious characters. Also, exchange money back into your home currency — or that of the country you’re visiting next — before you leave. Last June we left Serbia for Turkey with a wad of dinars, only to learn there was no exchange service that would trade them for euros, U.S. dollars, or any other currency at the airport. Having no other option, we wound up trading them in Istanbul at an absurdly low exchange rate.
Courtesy of Skip & Gabi Yetter
Skip and Gabi’s travels take them to busy cities like Istanbul (upper left), Marrakech (lower left), and more remote countries like Namibia (above).
U.S. dollars may be accepted as readily as the local currency in certain countries. The currencies in Belize, Barbados, the Bahamas, and a few other Caribbean nations convert to the U.S. dollar at fixed rates, making it easy to use either greenbacks or the local currency. Download the XE Currency app (available for iPhone and Android) before you leave on your trip. It’ll come in handy when you’re trying to calculate hotel and meal prices or assess the rates posted outside currency exchanges. Credit cards. You’ll almost always get the best exchange rate when buying foreign currency with ATM or credit cards — from 2 percent to 7 percent better than the rates you’ll get when exchanging cash. Use your credit card for large purchases such as hotel bills, train or plane tickets, and car rentals. However, keep in mind that many credit card companies add fees for transactions made in foreign currencies. Local vendors such as restaurants and shops may also charge a fee for credit card transactions. It is usually best to decline when a merchant offers to charge a purchase in your home currency, since they often use a higher-thanmarket currency exchange rate, and it doesn’t necessarily negate your
credit card’s foreign currency fees. In the end, it could cost you up to an additional 6 percent on your purchase. Research your credit card choices. Their currency conversion fees vary as much as 10 percent between the best and worst cards. In general, American Express cards are better than average, with a 2 percent fee, but are not as widely accepted overseas as Visa or MasterCard. Discover credit cards do not charge a fee, but are virtually unheard of outside the United States. Prepaid money cards. Prepaid cards are gaining popularity as a way to pay while abroad. They work much like prepaid gift cards. You load money on the card and spend until the balance reaches zero. You can top it off again using cash, a bank transfer, or a credit card. Prepaid cards are safer than debit or credit cards since, should someone steal it, he or she could spend only the amount remaining on it. Some prepaid cards allow you to load them up with foreign currency and won’t charge you when you use them overseas, making them even more ideal for international vacation spending. Continued on page 8
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International money quirks. Before you travel, research exchange rates and specific rules or guidelines. For example, until recently, Myanmar had few ATMs, and currency exchange services demanded pristine, unmarked $100 notes with no folds or tears. When we visited in 2012, we carried our bills between the pages of a book to keep them flat and unscathed, so we had no problem. But we bumped into a couple in Bagan whose stash of bills was old and torn or had fold marks on them, rendering them unusable. We traded some of our untarnished bills for some of their worn greenbacks so they were able to continue their trip.
WHEN USING AN ATM IN A FOREIGN COUNTRY, WATCH OUT FOR THESE FEES: YOUR BANK’S FOREIGN ATM FEE. If your financial institution doesn’t have a branch where you are traveling, you’ll be at the mercy of an ATM belonging to a private company or other financial institution that will likely charge a per-transaction fee for using its system. Some institutions offer no-fee foreign ATM transactions. FOREIGN ATM FEE. Many foreign banks and almost all private ATMs will charge a fee of their own to use their ATMs. See if your institutions waive these fees. CURRENCY CONVERSION FEES. You may be hit with an additional currency conversion fee. These fees are usually charged by your home bank and expressed as a higher-than-market currency conversion rate. They’re often minimal in comparison to other currency conversion fees (e.g., those charged by credit card companies), but still worth investigating.
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Security. Even the safest neighborhoods in the most secure countries have risks, but a few simple steps will help you travel safely and securely. Make a photocopy of your passport and store it in a place separate from your valuables, credit cards, and money. If it’s lost or stolen, these copies will make it much smoother when you go to the embassy to secure a temporary replacement. Take advantage of hotel safes and safe deposit boxes. If you’re traveling in high-petty-theft places (like Cambodia, Vietnam, Ecuador, and South Africa), where local pickpockets target tourists, don’t wear flashy jewelry or watches — and leave your purse safely locked away. Use your credit card judiciously; unsuspecting credit card users are targets for fraud. If you enter a PIN, protect it from being seen, and, if you sign for your purchase, watch vendors to ensure that they aren’t double-swiping or recording your information for later use. Regularly check your credit card transactions online to guard against fraud and abuse. At the time of writing, we’re in South Africa, where we’re indulging in exotic meals, staying in comfortable hotels, and traveling through game parks — all at a fraction of what it would cost elsewhere. We tend to seek the out-of-the-way places where most tourists don’t go. That’s where the richest experiences await. As far as we’re concerned, it’s worth the time and effort to step well away from the trampled paths of international tourists. And with these few simple precautions, having access to our funds while on the go is last on our list of concerns.
Using Data to Revolutionize
MEDICINE by constantine von hoffman
The word revolutionary is used far too often, especially when talking about technology. Remember all the hype around the Segway? It was going to revolutionize personal transportation. Experts predicted that cities would have to reorganize their streets to accommodate them. While the little two-wheeled scooter is useful in particular circumstances and a lot of fun to ride, it remains, for the most part, a solution in search of a problem. For something to be truly revolutionary, it has to overturn the established order and transform how things are done. Considering that, it is hard to look at what John Q. Walker is doing and not think that he could be revolutionizing medicine. Continued on page 10
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What is he doing? He’s come up with a technology that eliminates a huge amount of the guesswork involved in diagnosis. Doing that means fewer expensive tests and a huge reduction in doctors prescribing medicines that patients don’t need. While this may seem like an extraordinary claim, it becomes less of one if you know Walker and what he’s already accomplished. Walker is 60 and lives in Raleigh, North Carolina. Prior to moving there, he was living in Rochester, Minnesota, and working for IBM. He got his start with the company in an unusual way. First, in the late 1970s during what would turn out to be his last semester of graduate school, he taught himself to be a computer hacker. At the same time, IBM was building a highly secure, completely new computer in Rochester. “And so I had a job at IBM, and eight hours a day, I would come in and break into our topsecret computer and tell them how I did it, every single day, day in and day out,” he says. “This was at a time when the word hacker wasn’t known. No one had any experience at this. And it made my career at IBM.” After a few years at IBM, he realized he wanted to pursue his Ph.D., and the company offered to send him anywhere he wanted to go to get it. The place he wanted to go was the University
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of North Carolina, to study computer science under Dr. Fred Brooks, chair of the department at that time. That’s where he earned his doctorate in software engineering. During and after that time, he worked at the IBM facility in Research Triangle Park that specialized in data communications. “It was 1981. It was a world of mainframe computers, which is not where I wanted to focus,” he says. “I wanted to work on local area networks and wireless technologies … and so they let me.” With the Internet era just over the horizon, it was a prescient decision. In 1995, he and three colleagues left IBM to found Ganymede Software, a company that made software that measured how fast computer networks pass data around. This software went from esoteric to essential a year later. That’s when the International Telecommunication Union started planning the first standards for voice communications over the Internet. What did Ganymede’s software do? It let telecommunications providers determine how well their networks handled Voice over Internet Protocol (better known as VoIP) calls. Not only did Walker and his co-founders nail when to start the company, they did the same when it came to selling Ganymede. That happened on March 10, 2000—the day the NASDAQ index hit its highest point. Following that, Walker returned to one of his first loves: music. As a teen he had taken piano lessons from one of his neighbors, Ruth Slenczynska. She wasn’t just a nice lady who happened to live on the same street. She had been a child prodigy who studied under famed
Russian pianist, composer, and conductor Sergei Rachmaninoff. Although Walker’s piano playing wasn’t serious (“I was a natural who never practiced, so I was never very good”), his love of music was. This helps explain his next company, Zenph Sound Innovations, which he started with one of Ganymede’s co-founders. “The two of us had the time and the resources to go solve the hardest problem of music,” he says. “That’s working backwards from how musicians play to being able to hear it again.” That meant transforming music from raw audio into a digitized series of perfectly described notes. This was far more than playing sheet music. It was capturing all the touches of a great performance, like how a string is plucked and the length of an almost unnoticed hesitation between musical phrases. Walker says Zenph’s software made it possible to hear a “re-performance” of an old recording, one better than the technology originally used. It’s not a remastering, which tries to fix an existing recording with equalization or noise reduction. Instead, it’s a new recording of a performance that empirically matches the earlier one. The software directs the playing of the music through an actual acoustic piano with minutely accurate timing and sensitivity. Zenph wound up being purchased by Steinway, which freed Walker to go after his next big thing: an effective treatment for Alzheimer’s disease. It was while pursuing this goal that he came up with a way to revolutionize the practice of medicine. Continued on page 12
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To treat a disease, you have to first know which disease it is. This seems obvious, but it’s not. A lot of patients today are treated on the basis of what the doctor thinks the disease is. The fact is that a lot of diagnosis is based on guesswork.
Continued from page 11
Walker is now chief technology officer of Muses Labs in Raleigh, North Carolina. The company creates software systems that enable personalized therapy for the treatment of complex diseases. Alzheimer’s is one such complex disease. It is the result of many interrelated factors and diseases, and those all vary from person to person. Treating Alzheimer’s requires understanding and treating many other diseases first. “Everyone’s Alzheimer’s and everyone’s cognitive decline and everyone’s mental status is different, and each needs to be unwound in a personalized way,” says Walker. “On the way to Alzheimer’s we have to solve Crohn’s disease and Gaucher’s disease and depression and diabetes, among other things, because they’re all contributors to it.” To treat a disease, you have to first know which disease it is. This seems obvious, but it’s not. A lot of patients today are treated on the basis of what the doctor thinks the disease is. The fact is that a lot of diagnosis is based on guesswork. “The best doctors can say, ‘Oh well, you’ve got this and this,’” says Walker. They come to that conclusion based on “their experience and all the connections, and the articles they read last night.” In other words, if you’re exhibiting symptoms X and Y, the doctor knows that those can be signs of disease A, so he or she treats you for it. “Well, it’s easy if it’s malaria or tuberculosis or something that’s got a one-toone ratio [of symptoms to disease],” he says. “But most things aren’t like that.” Those same symptoms could mean you have something else entirely. So, if the first treatment doesn’t work, a patient may have to undergo several tests until one of them comes back positive. The solution? First rule out all things it can’t be. How do you do that? A genome test costs $200, an extended blood test costs about $750, and an MRI scan can be done for as little as $500. All that information put together can give you a picture of a body’s ecosystem—the moving parts from the microbial level on up. But if you were to have all that done and then bring it to your average doctor, he or she wouldn’t know what to make of it. That’s where Muses Labs’ software comes in. Continued on page 14
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Three Things You Can Do to Reduce Your Risk of Alzheimer’s While there are many factors that drive cognitive decline, Walker says there are three that can be found in nearly all the patient records he’s examined: Lack of sleep. “You really need eight hours of sleep each night. Sleeping lets your brain rebuild and take out the garbage, if you will. It’s when the flow of cerebrospinal fluid in the brain increases and washes away waste proteins that build up between brain cells when you’re awake.” Lack of exercise. “Exercise rewires the brain. Nothing rebuilds neurons and complex brain structures like exercise. And the act of doing exercise causes all kinds of chemical releases that cause these things to happen.” Overconsumption of refined sugar. “When humans were evolving, it wasn’t like there was a lot of sugary fruit in our environment. We are not acclimated to dealing with the amount of inexpensive sugar we can get today. And it completely … I’m going to use the bad word … screws up our brain chemistry, and it’s happening across cultures. I am not on a vendetta against the sugar industry. It’s just that when you see the evidence, it’s like, holy cow, there is nothing we can do to accommodate the amount of sugar we see being consumed.” It turns out the science of taking care of your brain isn’t rocket science—it’s just common sense.
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“We take in all this data and describe what we’re seeing. We prioritize it, and we’ll weight it and say, ‘Look, here’s the status of all these things and to treat them, here’s where to start,’” says Walker. The result is fewer costly tests, less time spent trying to get the right diagnosis, and the right medicines to treat the right maladies. That last issue alone would have far-reaching effects. According to a study published earlier this year in The Journal of the American Medical Association, a third of the 47 million antibiotic prescriptions written in the U.S. each year are unnecessary. This overuse has led to the emergence of drug-resistant superbugs. “Doctors will be able to say, ‘Oh, you actually don’t have gluten sensitivity because I’ve looked at these eight genes … and I’ll tell you what they are … and you’re likely not gluten sensitive, even though all these things are “Doctors will be able to say, ‘Oh, present,’” says Walker. This isn’t just a theory, it’s already happening. The George Washington University Center for Integrative Medicine is using Muses Labs’ protocol to treat people at risk for Alzheimer’s and those already exhibiting early symptoms of the disease.
you actually don’t have gluten sensitivity because I’ve looked at these eight genes … and I’ll tell you what they are … and you’re likely not gluten sensitive, even though all these things are present.’”
John Q. Walker
How well does it work? While Muses Labs is still putting together a large, randomized test, at the recent Alzheimer’s Association International Conference held in Toronto, the company presented data from a pilot study of the protocol. “Of the people that have moved through the program with us who weren’t too advanced in their cognitive decline, we’ve been able to move all of their neuropsych test scores,” says Walker. “Everything is improved with our treatment program.” If Walker’s approach can do that with a disease as complex as Alzheimer’s, its impact on far simpler things could be even more profound. From even a short conversation with Walker, it becomes clear he believes his work at Muses Labs has the potential to dramatically improve the quality of health care—and the lives of many who suffer from complex conditions like Alzheimer’s disease. It is impossible not to notice his energy and enthusiasm when he speaks about his latest venture. He is excited and engaged. This, coming from a man who has already had a remarkable career of innovation. While only time will tell if the work Walker is doing at Muses Labs will revolutionize medicine, it’s comforting to know that this crazy-smart and passionate gentleman is on the case.
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KILLER COMPLEX DISEASES COST OF CARE
ALZHEIMER’S A Growing Concern?
Total cost of care for top three leading killer complex diseases in the last five years of life.
Between 2000 and 2013, deaths resulting from stroke, heart disease, and prostate cancer decreased, whereas deaths from Alzheimer’s disease increased 71 percent. The actual number of deaths to which Alzheimer’s disease contributes is likely much larger than the number recorded on death certificates.
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DEMENTIA
$287,038
71%
2
HEART DISEASE
CANCER
$175,136
$173,383
Out-of-Pocket Costs
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STROKE
HEART DISEASE
PROSTATE CANCER
23%
14%
11%
ALZHEIMER’S
Every 66 seconds, someone in the U.S. develops Alzheimer’s disease. It will be every 33 seconds by 2050.
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An estimated 5.4 million Americans have Alzheimer’s disease. By mid-century that number is projected to grow to 13.8 million, driven mostly by an aging baby boom generation.
million
13.8 million
Average Paid by Medicare: $100,000
VESTED Voices: Available November 16, 2016 Want to hear more from your favorite VESTED subject matter experts? Introducing the new VESTED Voices short film series, in which we’ll bring one story from every issue to life on screen. To watch our film this issue featuring the groundbreaking work and
Sources: The New York Times. Costs for Dementia Care Far Exceeding Other Diseases, Study Finds. October 26, 2015. Alzheimer’s Association. 2016 Alzheimer’s Disease Facts and Figures. April 2016.
research from Dr. John Q. Walker, visit www.captrustadvisors.com/vestedvoices.
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Old Dog, New Trick: The Power of Adult Learning by kim painter
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Jeffrey Watson remembers the time his mother, then 45, decided to learn to play the piano, a lifelong dream for a woman who lost her chance to play as a child when her impoverished family had to break up their piano for firewood. She had been practicing every night for about two weeks when she decided to take a break and go to a movie instead. “My dad told her she couldn’t go to the movies until she practiced her piano,” Watson recalls. Frustrated, “she went and got her piano book, brought it out, laid it on the table, and said, ‘I quit.’” Any adult who has ever taken up something new and difficult — from music to chess to tennis to a foreign language — will recognize that both of Watson’s parents had a point. It takes discipline to master a new skill, especially with an aging brain and body. But if your new pursuit is less alluring than a night at the movies (or, these days, an evening with Netflix), why would you even bother? And yet, many people do bother for all sorts of reasons, including the desire to use — and not lose — their aging brains and bodies. Among them is Watson, a professional pianist who teaches at George Washington University in Washington, D.C. The subject he’s taken up at the age of 52 is Spanish. He spends about two hours a day studying the language and recently participated in a two-week immersion program in Guatemala, where he lived with a host family that spoke only Spanish and worked with a tutor for four hours a day. Continued on page 18
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“If you are my age, you are not going to find 10,000 hours to do anything. If you did, you wouldn’t get to the top. But the more time you devote to something, the better you are going to get.” Gerald Marzorati Author, Late to the Ball
Linda Harris, 60, owner of a property management company, is another. Like Watson’s mother, she took up piano to address a childhood regret — her refusal to touch “the old, beat up” instrument her parents had wanted her to play. After both parents died of Alzheimer’s complications, Harris decided that, in their memory and to boost her own brain health, she would give the piano a try. She bought herself a beautiful baby grand piano and put it in her sunroom and, four years later, she performs at her church and at social gatherings. Another is Gerald Marzorati, 63, a former editor of The New York Times Magazine. In his mid-50s, he took up tennis, not just as a casual pastime, but as a passion, a story he tells in his recently published book, Late to the Ball. “My kids had reached the age where they were starting to look at colleges,” says Marzorati, who lives in Pelham, New York. “Suddenly those weekend days I would spend coaching sports or ferrying them around to their various events began to wane. My career was winding down as well, and I sensed the need for another challenge. And I wanted it to be a physical activity.” He wanted to do more than just hit a few balls around. He wanted to excel, to play the kind of game he had admired as a lifelong tennis fan — albeit one who had never picked up a racket. “Tennis is an elegant and beautiful game,” he says.
Courtesy of Gerald Marzorati
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GETTING STARTED “My kids had reached the age where they were starting to look at colleges. Suddenly those weekend days I would spend coaching sports or ferrying them around to their various events began to wane. My career was winding down as well, and I sensed the need for another challenge. And I wanted it to be a physical activity.” Gerald Marzorati Author, Late to the Ball
Ready to take up piano, tennis, a foreign language, or late-in-life high jumping — and want to get as good as you can get? Here are some tips from Peak: Secrets from the New Science of Expertise by Anders Ericsson and Robert Pool: FIND A GOOD TEACHER. YouTube videos don’t count because the expert won’t be able to see what you are doing wrong and correct you. Ideally, you will find a teacher experienced with adult students like you. Be prepared to change teachers as your skills grow. Someone who works only with beginners may not be able to push you past beginning skills.
Learning New Tricks In his book, Marzorati raises a question: just how good can a relatively old guy (or gal) get at something usually taken up in childhood or adolescence? After all, many of us have heard that it takes roughly 10,000 hours to master a skill. “If you are my age, you are not going to find 10,000 hours to do anything,” he says. “If you did, you wouldn’t get to the top. But the more time you devote to something, the better you are going to get.” Experts generally agree. “What you see across a lot of domains is that there’s a peak age of performance,” says D. Zachary Hambrick, a Michigan State University professor of psychology who studies the science of expertise. Mathematicians and physicists peak in their late 20s, he says. Chess players peak in their 40s. In many fields, the age at which you start matters too. That includes chess, and it also includes sports in which training literally reshapes growing bodies. Think of a ballerina’s hip and knee joints or a baseball pitcher’s shoulder, says Anders Ericsson, a professor of psychology at Florida State University. His most recent book is titled Peak: Secrets from the New Science of Expertise (co-written with Robert Pool). But both Hambrick and Ericsson say none of those facts should discourage older novices from reaching for their personal bests.
PRACTICE WITH SINGLE-MINDED FOCUS. There’s a difference between joyfully singing a song and working to perfect your vocal technique and breath control. It takes that kind of focused practice to improve. Don’t practice for longer than you can focus. It’s better to train at 100 percent effort for a short time than 70 percent effort for a longer time. You should shoot for up to an hour of focused practice each day, at a time when you have no other obligations. WHEN YOU HIT A PLATEAU, DON’T GIVE UP. Instead, push yourself a bit harder to find the sticking point. If you are a competitive athlete or game player, take on a tougher-than-usual opponent. Your weaknesses will shine through and give you something specific to work on next. Believe in yourself, and surround yourself with people who support and encourage your endeavors. Join a team, a club, or other group of people pursuing the same dreams.
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“Old dogs can learn new tricks, maybe not as rapidly and easily as younger dogs, but it’s not as if after young adulthood we lose the ability to learn complex skills,” Hambrick says. And some old dogs are making it further in sports and other fields than once thought possible, Ericsson says. He points to increasingly popular competitions for older athletes, including the National Senior Games (sometimes called the Senior Olympics). One of his favorite examples is Donald Pellmann, a 101-year-old man from Santa Clara, California, who became the first centenarian to run 100 meters in less than 27 seconds in 2015. He also broke records in the long jump, discus, Anders Ericsson says the most important thing for shot put, and high jump — where he was the first in his age group ambitious beginners to know is that it takes more to clear the bar at any qualifying height, according to a New York Times account of his feats. than time and repetition to master a skill. It takes
what he calls “deliberate practice.”
“The way so many records have been broken has been pretty remarkable,” Ericsson says. Apparently, when athletes have a reason to keep on training, “they end up being able to perform at levels that people once thought were impossible for older individuals.” But not just any training will do. Ericsson, it’s worth noting, conducted the original research behind the 10,000-hour idea, a concept popularized in Malcolm Gladwell’s 2008 book Outliers, that claims it takes roughly 10,000 hours of practice to become great at anything. For years, Ericsson has taken issue with Gladwell’s interpretation, noting that 10,000 hours was the average practice time put in by star performers in one field (violin), up to one point (age 20). But, he says, the most important thing for ambitious beginners to know is that it takes more than time and repetition to master a skill. It takes what he calls “deliberate practice.” The hallmarks of this kind of practice, he says, are pushing beyond one’s comfort zone, using proven training methods designed by experts, and using feedback from coaches and teachers to overcome weaknesses. Rule one, he says, is that you can’t do it alone.
Still Improving, at Any Age
Courtesy of Anders Ericsson
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Harris, the piano-playing property manager, learned that lesson early on. “Initially I bought some books, and I thought I could teach myself,” she says, but after managing just “a couple little songs,” she signed up for lessons. Her routine: an hour each week with a teacher and two hours practicing on her own each day. She also goes to an adult piano camp each summer. And she belongs to a group for adult piano students who get together once a month to play for one another. Those get-togethers keep her motivated, she says, and “really are one of the highlights of my life.”
Harris says she can now play almost any modern piece and can play lengthy classical pieces. She wants to do more, including composing. With retirement in sight and her youngest child away at college, she sees no reason she can’t keep improving.
Linda Harris, standing, gathers with fellow adult piano students who get together once a month to play for one another. Photo courtesy of Harris.
Watson, the musician who recently took up Spanish, says he’s been at it for only a few months, but that his all-in approach, including the intense two weeks in Guatemala, has given him the confidence to start conversing in the language. Marzorati, the tennis-playing former editor, says his game is still improving too, nine years after he took his first lessons. With the help of a patient-but-demanding coach, weeks away at training camps and retreats, and a decent forehand, he competed as a singles player on the national seniors tournament circuit. These days, he plays in less demanding doubles leagues. He wins some, he loses some. “The key is not to get focused on the end results,” he says. “The key is the steady improvement at something, which is its own reward.” And there are other payoffs, he says. “I’ve gotten myself into the best shape I’ve ever been relative to my age anytime in my life. I sleep better. I’m more attentive to what I eat.” Mostly, he says, he’s grateful every time he gets to play: “I say to myself, ‘Look at you. You are 63; you’re out on a tennis court on a gorgeous night; you are happy and healthy; and you are with someone who is happy and healthy. Aren’t we all lucky?’”
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SHINING A LIGHT ON
MENTAL ILLNESS by nanci hellmich
Sometimes a glimmer of hope emerges from the darkest times of people’s lives. Such was the case for the Eure family of Raleigh, North Carolina. Alice and Thad Eure Jr. were living the American dream in the 1950s and 1960s. Thad was an entrepreneur with a gift for starting restaurants. In 1960, he and a partner opened the Angus Barn, a large upscale steakhouse restaurant on the outskirts of Raleigh, and later they created Darryl’s, a casual dining restaurant chain. Thad also started the 42nd Street Oyster Bar and Fat Daddy’s, a burger concept. The Eures had two beautiful, intelligent daughters, Van and Shelley, and a bright, athletic son, Thad J. Eure III. But in 1975, their teenage son started showing signs of mental illness, going through manic highs and extreme lows, says his sister Shelley Eure Belk. “It was severe. We didn’t know what was going on. It was a scary time for our family. My mom and dad went to seek help for him, and in that process, they realized how little was known about mental illness,” she says.
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“Through these struggles, I remember my mother poring through books and trying to learn as much as she could. My parents worked hard to find the right treatment,” Shelley says. Over 10 years, the couple took their son to different physicians. He was hospitalized numerous times and spent time in seven different mental institutions. Doctors struggled with his diagnosis and told the family that more research needed to be done on mental illness, says Van Eure, owner of the Angus Barn. He was later diagnosed with severe bipolar disorder and schizoaffective disorder. The latter is a chronic mental health condition characterized by symptoms of schizophrenia, such as hallucinations or delusions and symptoms of a mood disorder, such as mania and depression.
of helplessness, hopelessness, frustration, and desperation.” But out of the “dark abyss came a fragile and delicate ray of light.” Van says their dad wanted the foundation’s work to help others. “He said, ‘I may not be able to make my own son well, but I may be able to do something for other people who may be going through the same thing.’” Van Eure (left) and sister, Shelley Eure Belk.
“There are so many brilliant researchers with great ideas who need the opportunity to explore their theories.” Shelley Eure Belk
In 1984, the Eures established the Foundation of Hope for Research and Treatment of Mental Illness, which funds research to investigate the causes and potential treatments for a range of serious, debilitating mental illnesses, such as depression, schizophrenia, eating disorders, post-traumatic stress syndrome, addiction, and women’s mood disorders, including postpartum depression, says Shelley, who is executive director of the foundation. Today, Thad III, who lives on his own, is under the care of a psychiatrist. He still struggles with the ups and downs that come with his illnesses. In a 2013 letter to foundation donors, he said that after the hospitalizations of his young adult years, his parents “reached a state
The foundation encourages scientists in the department of psychiatry at the University of North Carolina School of Medicine to submit research project ideas. The foundation’s scientific advisory board decides which will receive grants and awards money to pilot studies. “There are so many brilliant researchers with great ideas who need the opportunity to explore their theories,” Shelley says. This often leads to other opportunities for funding.
Since inception, the foundation has funded more than 125 scientific research grants totaling more than $4.7 million. And projects backed by the foundation have garnered more than $145 million in additional funding from the federal government and other sources, she says. “That’s the beauty of our organization. We are planting seeds.” The research supported by the foundation is “quite remarkable,” says Dr. David Rubinow, chair of UNC’s department of psychiatry. “There are new forms of treatment, new targets of treatment, and new treatment delivery systems—all of which have emerged from grants that Continued on page 24
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The Foundation of Hope’s Research Topics The Foundation of Hope for Research and Treatment of Mental Illness has funded many innovative pilot studies that later generated additional funding with other grants. Examples of this include research on: • Infants at risk for autism Seed Grant: $39,999 Additional Funding: $10 million • The genetics of anorexia nervosa Seed Grant: $40,768 Additional Funding: $7.2 million • Non-invasive brain stimulation Seed Grant: $40,000 Additional Funding: $2.25 million • Oxytocin treatment of social deficits and paranoia in schizophrenia Seed Grant: $33,000 Additional Funding: $1.6 million
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Above, Van Eure and Shelley Eure Belk stand among a crowd of supporters at the 2016 Walk for Hope.
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were initially supported by the Foundation of Hope.” Steve Thanhauser, Van’s husband and a member of the foundation’s board of directors, says the group has backed the work of “cutting-edge researchers who are passionate about coming up with breakthrough cures.” The nonprofit organization has also funded 36 community grants totaling more than $300,000 to support effective mental health treatment programs in the Raleigh area, Shelley says. Although the foundation was established as an endowment from the Eures, it has grown into something bigger. Before their father died of pancreatic cancer in 1988, he asked that any donations made in his honor go to mental health research, not cancer studies. He told his family, “I’ve lived a wonderful life, but the life my son’s living is not the kind of life anyone should have to live.” His friends took his request to heart. The year after his death, a group of employees at the Angus Barn and his other restaurants started the Thad Eure Jr. Walk for Hope to raise awareness and money for the foundation. About 200 participants earned about $30,000 in the first walk, which stretched 12 miles from the Angus Barn to the 42nd Street Oyster Bar in downtown Raleigh.
About the Foundation of Hope The Foundation of Hope promotes scientific research aimed at discovering the causes and potential cures for mental illness in order to develop a more effective means of treatment. It is committed to raising community awareness and supporting effective treatment programs. The foundation provides financial support for ongoing and new research and treatment as well as the development of researchers at the University of North Carolina at Chapel Hill, its affiliated psychiatric institutions, and local mental health agencies. For more information, visit: www.walkforhope.com
After Alice Eure died in 1997, the name of the annual event, held the second Sunday of October, was changed to the Thad and Alice Eure Walk (www.walkforhope.com). It’s now a 10K walk/run, which begins and ends at the Angus Barn where there’s a celebration that includes food, beverages, and prizes donated by companies who sponsor the event. In October, more than 4,000 people participated. Those who come often talk about their family members who suffer from mental illness, Van says. “It’s an incredibly emotionally fulfilling day. There’s no way you can leave there and not feel good about what you’ve been part of.” Besides the walk, the foundation hosts Evening of Hope, an annual gala and auction. Past speakers have included Mariel Hemingway; Judy Collins; Zak Williams, the son of the late Robin Williams; and Ashley Judd, who has openly talked about her struggles with depression. In his letter to donors, Thad III wrote: “It is the philosophy of the Eure Family that if we can help just one individual who suffers from chronic mental illness lead a better, more productive and meaningful life, then we have done something very special.”
“It’s an incredibly emotionally fulfilling day. There’s no way you can leave there and not feel good about what you’ve been part of.” Van Eure
Shelley says the Foundation of Hope has become so successful because of its ability to stay the course and not get off track. “We have built this organization one research project at a time, one donor at a time, one walker at a time.”
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THE PRODUCTIVITY
CONUNDRUM We recently polled the members of CAPTRUST’s Investment Committee to get a feel for what longerterm or structural topics they felt readers should be aware of in the coming months. What issue or issues will drive their discussions? Their immediate response: productivity. They noted a meaningful gap between economists’ thoughts on this foundational topic and what is covered in the popular press. We will explore the concept of productivity and its implications for investors, offering insight into a topic with both relevance and shelf life. The word productivity has several meanings in everyday life. What is productivity, and why do you view it as such a key issue? Productivity, in the economic sense, measures how many goods and services a person or a machine can produce. More formally, as it is measured by the U.S. Bureau of Labor Statistics, productivity measures how efficiently inputs are converted to outputs.1 Inputs are defined as the resources and tools needed to create goods and services. Outputs are the actual items produced. The more productive a person or a company is, the more goods and services it can produce. Companies evaluate their supply chain, operational processes, and technological efficiencies to work smarter and faster. Employees become more productive through additional education and training and by learning new skills. More productive employees have historically earned more, and more productive companies have enjoyed higher profits than their peers, which translates to a higher standard of living.2
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Evidence suggests that the more productive a person or business is, the better off they are economically. Is this accurate? Yes. Let’s take the simple example of a pizzeria. The more pies we sell, the more revenue we generate. Our inputs are ingredients, energy to heat the ovens, and labor in the form of chefs and a wait staff. Let’s say that we have a special recipe that everyone in the neighborhood wants, and they will eat as much pizza as we can produce (that would be a nice problem for any business to have). If this If this magical pizza recipe and our service magical pizza recipe and our service standards normally produce standards normally produce 40 pies in an hour, 40 pies in an hour, but through improvements in our ovens and but through improvements in our ovens and table turnover, our output jumps to 60 pies per hour, our productivity just jumped by 50 percent. table turnover, our output jumps to 60 pies per
hour, our productivity just jumped by 50 percent. With that extra output, we can produce and sell more pizza. Alternatively, we could choose to produce the same number of pies as our original output, but since it would take less time to produce 40 pizzas, we can use that extra time to promote our pizza to other neighborhoods or just call it a day and go see a movie, which of course benefits the theater I may not have gone to had I not improved my productivity. What are current productivity trends? Figure One shows year-over-year American labor productivity changes. The gold line represents annual percentage changes, and the dashed line is a long-term trend line, which measures the data’s general direction. Immediately following World War II, labor productivity showed considerable expansion for reasons easy to intuit; people went to school for more training, businesses focused on process improvements, and technological advances started to permeate the workplace. Except for a brief dip in 1956, productivity increased every year until 1974. The mid-1970s and early 1980s saw a challenging economic environment, but labor productivity has been positive every year since 1982. Improved computing power and accessibility, information technology advances, and further supply chain enhancements have contributed to a favorable productivity backdrop. Continued on page 28
Figure One: U.S. Labor Productivity Average Percent Change From Prior Year, 1948 – 2015 6%
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Source: Bureau of Labor Statistics
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Figure Two: Annual Percent Change in G7 in Labor Productivity, 1971–2015 5%
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Source: Organization for Economic Cooperation and Development (OECD)
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However, the data’s trend line reveals a concerning development. The overall trend moves from the upper left (higher productivity) to the lower right (lower productivity). Data for the rest of the world is not much better. Figure Two graphs productivity of the Group of Seven (G7) nations — the U.S., Japan, Germany, the UK, France, Italy, and Canada. As you can see, this trend line for these industrialized democracies also slopes from the upper left to the lower right.
Clearly we have an issue in the U.S. and abroad. But how important is productivity? Isn’t productivity one variable among many? Economists emphasize how critical productivity growth is for all countries. U.S. Federal Reserve Vice Chairman Stanley Fischer recently declared, “there are few issues more important for the future of our economy, and those of every other country, than the rate of productivity growth.”3 Fischer explains why small percent changes make a real difference: At a 1 percent growth rate, it takes income 70 years to double. At a 2 percent growth rate, it takes 35 years to double. That is to say, that with a growth rate of 1 percent per capita, it takes two generations for per capita income to double; at a 2 percent per capita growth rate, it takes one generation for per capita income to double. That is a massive difference, one that would very likely have severe consequences for the national mood, and possibly for economic policy.4 Back to our pizza parlor, the multiplicative effects of productivity start with the individual worker or business and expand out to the broad economy. Higher productivity leads to more sales, more tips for the waiters, and even more leisure time that may generate sales for other businesses such as the movie theater in our example.
While the trend line appears to be heading lower, will productivity necessarily continue to decline? While Fischer emphasizes productivity’s importance, other economists weigh in on its fate. Northwestern University’s Robert Gordon published The Rise and Fall of American Growth in early 2016, arguing that, “Economic growth is not a steady process that creates economic advance at a regular pace, century after century.” His central premise is that “some inventions are more important than others.”5 Gordon focuses on total factor productivity (TFP), which measures how
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Figure Three: U.S. Total Factor Productivity, 1948 – 2015 8% 6% 4% 2% 0% -2% -4%
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Source: Federal Reserve Bank of San Francisco
quickly output grows relative to both labor (workers) and capital (machines and financial assets). Gordon claims that TFP’s anemic performance since 1970 is a function of inventions “channeled into a narrow sphere of human activity having to do with entertainment, communications, and the collecting and processing of information.”6 Figure Three shows Gordon’s assertions graphically. Others, including MIT economists Erik Brynjolfsson and Andrew McAfee, disagree that innovation’s best days are behind us. In their book The Second Machine Age, the authors assert that the steam engine was the pivotal invention behind the Industrial Revolution, and “the key building blocks are already in place for digital technologies to be as important and transformational to society and the economy Just as the steam engine was as the steam engine.”7 Just as the steam engine was improved over time, the authors note, so too will computing powers and digitization improve over time. improved over time, the authors Further, the digital transformation will create a different type of economy than note, so too will computing powers what we are all used to, so while adjustments will follow, “it’s an inflection point and digitization improve over time. in the right direction — bounty instead of scarcity, freedom instead of constraint — but one that will bring with it some difficult challenges and choices.”8 The authors offer that the impact of technological advances will be wide-ranging, impacting everything from transportation to medicine to food, a counter to Gordon’s view on how narrow advancements have been since 1970.
So who is right, and what is the tie-in to the capital markets? Those are the central questions. As we have discussed in prior articles, economic growth is not a great predictor of equity market and other risk-asset performance.9 However, since productivity has such a large impact on economic growth prospects, labor and total factor productivity’s declining trend concerns central bankers, especially given our weak economic growth since the financial crisis. This remains a central-bank-driven capital market environment, meaning stocks, bonds, currencies, and commodities are all highly dependent on what central banks communicate about their policies. As the quote from Fischer suggests, central bankers are hyperfocused on productivity trends. Continued on page 30
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We see value in both Gordon’s argument about innovations and McAfee’s perspective on digitization. However, demographics of industrialized nations suggest weak population growth compared to the last 100 years, which means that total factor productivity will be even more reliant on capital efficiency. Capital efficiency is ultimately a deflationary phenomenon, with advancements leading to lower prices and not necessarily leading to higher wages. Thus, we see central bankers remaining very accommodative with policies, remaining on the side of easier access to capital and less likely to raise interest rates. This tends to be favorable for stocks, and for the time being, it is friendly for bonds as well, but we remain concerned about bonds’ future return prospects — especially relative to investors’ expectations based upon their recent experience. Major central banks, including those in the U.S., Europe, Japan, China, Switzerland, and England, have maintained pro-growth orientations since the depths of the financial crisis. These policies have extended a tepid economic recovery and muted the business cycle. We see ourselves toward the tail end of the U.S. economy’s expansion. That suggests assets like high-quality Major central banks, including those in the U.S., cyclical stocks and parts of the bond market should do well. We see the risk-reward trade-off becoming more challenging for stocks and bonds alike as we head toward the latter part of this cycle, and while economic growth typically doesn’t tell the asset price story, the current capital market environment suggests otherwise. Central banks drive markets, and they are focused on productivity, a direct corollary to economic growth.
Europe, Japan, China, Switzerland, and England have maintained pro-growth orientations since the depths of the financial crisis. These policies have extended a tepid economic recovery and muted the business cycle.
Productivity across the G7 remains under pressure, and until the next new thing emerges to propel economic growth, expect a sluggish, late-cycle economic growth pattern to keep central bankers at bay. The biggest risks in the system are capital markets’ dependence on central bankers and central bankers’ limited tool kits. Should their ability to extend the business cycle fail, risks could emerge. We will keep you posted on our readings of these interactions as they develop. Now go out and do something productive. The economy depends on it.
Sources 1 http://www.bls.gov/lpc. Accessed 10/7/2016. 2 Ibid. 3 http://www.federalreserve.gov/newsevents/speech/fischer20160307a.htm. Accessed 10/7/2016. 4 Ibid. 5 Gordon, Robert. The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War. Princeton: Princeton University Press, 2016, pp 2-3. 6 Ibid. 7 Brynjolfsson, Erik, and McAfee, Andrew. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York: W.W. Norton & Company, 2014, p 9. 8 Ibid, p 11. 9 Dimson, Elroy, Marsh, Paul, and Staunton, Mike. Triumph of the Optimists: 101 Years of Global Investment Returns. Princeton: Princeton University Press, 2002.
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MARKETS CONTINUE TO MARCH HIGHER Returns have been strong so far this year, especially in light of subdued expectations heading into the year. With equity markets delivering their worst start to a year in history and the UK Brexit vote in the second quarter, investors welcomed the third quarter’s relative calm. • U.S. stocks continued their ascent, led by technology and financial stocks. Meanwhile, telecommunications and utility stocks lagged for the quarter. • Broad U.S. bond indexes were flat, muting a rally that defied predictions of higher interest rates and falling bond prices. Longer-maturity bonds fell modestly for the quarter, while high yield bonds rallied.
16.4%
• Developed international stocks stopped a two-quarter decline, rallying handsomely. Japan remains an underperformer. Emerging market stocks jumped, thanks to calm interest rates. • Commodities paused following the second quarter’s upward march. Crude oil prices fell on production increase announcements. • Real estate treaded water during the third quarter. As an asset class, real estate has compounded almost three times as much as U.S. stocks since 2000.
11.0%
MARKET INDEX PERFORMANCE
9.2%
8.9%
(as of 9.30.2016)
7.8%
6.5% 5.8%
3.9% 2.2% 0.5% International Stocks
U.S. Bonds
-3.9%
-1.2%
U.S. Stocks
Emerging Market Stocks
Real Estate
LOOKING FORWARD Early in the fourth quarter, investors were focused on the U.S. elections and central bank activity. The Bank of Japan recently announced its latest attempt to spur growth. The European Central Bank could follow suit to address the region’s sluggish economy. Meanwhile, encouraging U.S. economic data may give the Federal Reserve confidence to proceed with an interest rate hike. While the UK’s economy could suffer as a result of the Brexit vote, the global economy should avoid a direct impact. However, should markets receive a surprise from the U.S. election, the Fed, or European policy makers, investors may see volatility increase.
Commodities
Q3 2016
YTD 2016
Asset class returns are represented by the following indexes: U.S. large-cap stocks (S&P 500 Index), international stocks (MSCI EAFE Index), emerging market stocks (MSCI Emerging Markets Index), U.S. bonds (Barclays U.S. Aggregate Bond Index), commodities (Bloomberg Commodity Index), and real estate (Dow Jones U.S. Real Estate Index).
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HOOKED ON
by nanci hellmich
FLY FISHING
Fly fishermen’s passion for the pursuit runs deep. Rush Benton, 57, enjoys everything about it. “You are in beautiful surroundings interacting with nature. You are in the river, and the water is moving,” says Benton, senior director of wealth management for CAPTRUST in Raleigh, North Carolina. “It’s a thinking sport. You have to think about what fly to use and how to present it to the fish. You have to read the water to figure out where the fish might be holding.”
“You can’t fly fish and worry about anything else. It’s an all-consuming intellectual and physical pursuit. Whether you are standing in a stream feeling the water around your legs and watching a warbler in the trees or concentrating on a trout feeding, you are immersed in it.” Tom Rosenbauer Author, The Orvis Fly-Fishing Guide
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There’s something rewarding about catching a fish after you’ve made a good cast with the right fly, adds Benton, who fly fishes regularly for smallmouth bass in a creek on his farm in Tennessee and for trout on vacations in Montana, a mecca for fly fishermen. Others are equally effusive. It’s a great escape, says Tom Rosenbauer, 62, author of The Orvis Fly-Fishing Guide and Fly Fishing for Trout. He has been fly fishing for 50 years and writing about it for 40. “You can’t fly fish and worry about anything else. It’s an all-consuming intellectual and physical pursuit. Whether you are standing in a stream feeling the water around your legs and watching a warbler in the trees or concentrating on a trout feeding, you are immersed in it.” Danny Summerlin, 44, a CAPTRUST financial advisor in Raleigh, North Carolina, agrees. Over the summer, he went on a four-day fly-fishing trip to the Canadian Rockies, where he was surrounded by mountain peaks, waterfalls, and crystal-clear rivers. He disconnected from the rest of the world. “You are concentrating so hard on the fish in a breathtaking setting that you forget about anything else,” he says. About 4 million people fly fish, according to the American Fly Fishing Trade Association. It’s a male-dominated sport, but more women are getting into it, says Jess McGlothlin, 28, communications director for the association in Bozeman, Montana. She fly fishes frequently, sometimes in flip-flops and a skirt. For some people it’s a way of life—they fly fish during the week, on the weekends, and on their vacations, says Michael Caranci, 35, a manager of The Fly Shop in Redding, California. The difference between fly fishing and conventional tackle fishing is that you are so much more involved, Caranci says. “You are engaged in everything you are doing. You are observing and moving. You are thinking: What is the fish eating, and how do I get this clump of chicken feathers to hook a fish with a brain the size of a pea? Even with such a small brain, they outwit us most of the time.” One of the appealing things about it for many anglers is you never stop learning. Besides improving your skills, you are studying entomology (insects) and the nature of rivers, he says. Some people are intimidated to try it because they think it’s too expensive or too hard, but it doesn’t have to be either, Caranci says. “You can spend a lot of money doing it, but you don’t need to, especially if you are just getting started.” Rosenbauer, the marketing manager of Orvis Rod & Tackle in Manchester, Vermont, agrees. You can pay as little as $150 for a rod, reel line, and leader, and another $10 for a few artificial flies, he says. You don’t need to worry about waders, vests, and all the other gear you see on TV. You can put your stuff in your pocket and wade in a stream in your shorts or quick-dry pants wearing a pair of sandals or sneakers. Plus, you don’t have to go to the expense of traveling. Most people can fly fish within five miles of their home or place of business, if they don’t care about catching a trout or salmon, Rosenbauer says. “Any place you can catch a fish, you can fly fish.” Continued on page 34
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What to Bring for a Fly-Fishing Trip Here are nine things you may need for a fly-fishing trip, according to Phil Monahan, editor of Orvis News: • Fly rod, reel, and line • Leader and tippet material to connect the fly line to the flies • Flies for the fish you’ll be trying to catch • Waders and wading boots
• Clippers or “nippers” to cut the line • Small forceps to remove hooks and flies • A good hat • Rain jacket
• Polarized sunglasses www.orvis.com/news Courtesy of Jim Evans
Continued from page 33
Some enthusiasts enjoy going to nice lodges and fishing in trout streams in beautiful locales such as New Zealand or Argentina. Like any pastime, you can spend a lot of money. To some people, the toys are part of the fun, he says. Before wading into fly fishing, Rosenbauer recommends learning some basic skills. There are several ways to get training, including attending a free class from a local fishing shop or Orvis store; learning from a friend or relative; teaching yourself by using videos, books, or magazines; attending a fishing school for a day or two; or working with a professional guide. Even veteran anglers sometimes hire guides so they can fish in the best parts of the water. Because fly fishermen usually catch and release, guides sometimes take several clients to the same spot over the course of a week and catch the same fish a couple times, Rosenbauer says. “Guides are important these days, because most people don’t have time to explore on their own.” Summerlin, who considers himself a novice, says working with a guide for several days during his recent trip to the Canadian Rockies made a big difference in his skills. “I would recommend spending time with a qualified guide. He or she will coach you as much as you want to be coached. It’s like getting a private lesson as opposed to doing it on your own and teaching yourself bad habits that you have to break later.”
“I would recommend spending time with a qualified guide. He or she will coach you as much as you want to be coached. It’s like getting a private lesson as opposed to doing it on your own and teaching yourself bad habits that you have to break later.”
The amount of respect that fly fishermen and guides have for the welfare of the fish is quite remarkable, he says. “They have a conservationist’s bent. They want the fish to live and reproduce so our children and grandchildren will be able to enjoy fishing like we are.”
Danny Summerlin Senior Vice President, Financial Advisor, CAPTRUST
It’s mesmerizing to watch an experienced fisherman cast, Summerlin says. Jim Evans, 64, former vice president of human
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Best Places to Fly Fish The sky’s the limit when it comes to beautiful places to fly fish in the United States and around the world, says Tom Rosenbauer, author of The Orvis Fly-Fishing Guide. Some recommendations: MONTANA. For trout fishing, Montana is Shangrila, he says. The state has great rivers and a really wonderful public access policy.
Courtesy of Clark Benton
Above: CAPTRUST’s Rush Benton and his son Clark catch a brown trout in the Big Horn River in Wyoming. Left: Jim Evans, former vice president of human resources at Orvis, admires a catch.
resources for Orvis, agrees. “When you watch someone who is an exceptionally good fly caster, your jaw drops,” he says. “I don’t always catch as many fish with the fly rod as I do with spinning tackle, but I love the serenity of fly fishing and the rhythm of the cast.” Casting a fly rod takes some practice, and it requires hand-eye coordination, Rosenbauer says. There are lots of different styles, and everybody casts differently. Another skill that anglers have to master is matching the flies to what the fish in the area are eating. Artificial flies are used to catch sunfish, bass, trout, pike, bluefish, shark, bonefish, sailfish, salmon, walleye, and even catfish, Rosenbauer says. When selecting flies to fish in different locations, you are trying to imitate the bugs that the fish eat, Benton says. He tries to cast so the fly hits a specific spot on the water where it looks completely natural as it drifts down the river. “Trout are good at picking up on what’s natural and what’s not. It’s challenging.” If you go into it with the expectation of catching a lot of fish, you may be disappointed, Benton says. Even an experienced fly fisherman can spend a day and catch just a fish or two, but you are still in a gorgeous setting doing something you like to do.
ALASKA. The fishing is so good it can be boring because it’s so easy to catch fish at certain times and places, he says. It can be surprisingly crowded in some places in Alaska, but you can certainly get away from the crowds. CATSKILL MOUNTAINS in New York and the APPALACHIAN MOUNTAINS in Tennessee, North Carolina, and Virginia. You’ll find superb trout fishing in these areas. Although the mountains are near large population centers, the fishing options are surprisingly uncrowded if you are willing to walk to a more remote area. THE BAHAMAS AND BELIZE. Both countries have excellent bonefish. The Bahamas has a nearly pristine habitat. PATAGONIA IN ARGENTINA AND CHILE. People say that Patagonia is like Montana 50 years ago, before the state became dotted with fast-food joints and RVs, he says. Trout were introduced in the late 1800s, and salmon were introduced approximately 30 years ago. The region’s clear waters make an ideal habitat for these species. NEW ZEALAND. “I haven’t been there, but it’s on my bucket list. It is supposed to have some of the best trout fishing in the universe,” says Rosenbauer.
And when you do land a big fish, it is exhilarating, Benton says. He takes a look at the prize and then releases it back into the water. “I’ve never kept a fish. I put them right back and catch them the next day.”
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The Time to Talk About Retirement
IS NOW by kathleen burns kingsbury
As you rush to work, run to pick up the kids, or scramble to make dinner, retirement may seem like a far-off dream. Or maybe you try to talk to your partner about planning for the future, only to end up in a fight about how much to save now so you can enjoy life later. You delay this money conversation hoping that, in time, it will get easier. The truth is that waiting can be detrimental to achieving a secure future. So the time to talk about retirement is now. The unpleasant truth is that 31 percent of Americans have no retirement savings or pensions at all.1 Others have started saving for retirement but are unrealistic about how much they will need to live comfortably during their golden years. Almost half of couples report having no idea how much they will need to save to maintain their current lifestyle in retirement. Another 47 percent of partners disagree about the amount of money they will need to do so.2 The good news is that working with a trusted financial advisor helps. More than 90 percent of baby boomers who work with an advisor have money saved for retirement. They report feeling better prepared for this life transition.3
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As Aaron J. Morris, vice president and financial advisor at CAPTRUST in Des Moines, Iowa, explains, “Many people have the idea in their minds that they have not saved enough for retirement, and they will have to work forever. That assumption is often proven wrong once they take the time to sit down with an advisor.” The reason many clients feel better is they have a time and place to have a meaningful conversation about both the financial and non-financial matters related to retirement from when, where, and how to retire to how much money they need to achieve their vision. Whether you are currently working with an advisor or not, here are three steps to help you begin this important money talk.
Step 1: Identify Your Retirement Mindset Every person has a retirement mindset. This is the set of thoughts and beliefs each of us has about this life transition. As with any mindset, family money experiences related to work and retirement have an influence. For example, if you grew up in a family business where the patriarch went to work every day until he died, you may want to emulate this person. Or you may want to avoid this fate because you saw firsthand how it affected the business and the family. Either way, your family history impacts how you envision this next phase of life. Do the exercise on the right to help you tap into your mindset. This can be done in an advisory meeting or as a couple. Review your answers. Look for insight into how your retirement mindset impacts your goals, dreams, or priorities. Then share your responses and observations with each other. Practice active listening by trying to put yourself in the other person’s shoes. The goal is to listen and understand each other — not to negotiate a compromise or convince your partner that your mindset is the right one.
Look for insight into how your retirement mindset impacts your goals, dreams, or priorities. Then share your responses and observations with each other.
Get into the Right Mindset Complete the following statements with the first thought that comes to your mind. Don’t overthink your answers; the purpose of this activity is to uncover your automatic beliefs about this transition. Each partner should complete this activity separately before discussing it. When I think of the word “retirement,” I picture:
In my family, retirement is:
My ideal day in retirement would be:
My number one priority during retirement will be:
If I could pick a new word to replace “retirement,” it would be:
By discussing your respective retirement mindsets, you avoid focusing on dollars and cents and can concentrate on how your motivations steer you toward similar or different financial decisions. Continued on page 38
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Continued from page 37
Step 2: Embrace Differences Half of couples surveyed found that they disagree on their expected retirement age.4 And that’s only one part of the retirement puzzle. Expect to find some areas where you don’t see eye to eye. Instead of viewing these as problematic, see them as opportunities to get to know your partner better. For example, if you can’t wait to quit your day job, but your partner wants to work part-time, find out why. Ask open-ended questions, and discover what makes working important to him or her. Often the retirement goal or activity is different, but the value each of you is honoring is the same. Work may give your partner a creative outlet, while not working may provide you time to pursue your creative interests. Expect conflicts to arise during retirement planning. Discussing these matters before transitioning to retirement is ideal. This way a plan can be put into place that incorporates individual and joint goals. So don’t avoid conflict; embrace it.
Step 3: Expect Mixed Emotions Planning for this life transition can bring mixed feelings. At times you may feel excited and joyful; other times, fearful and anxious. For women, the emotional side of planning can be more pronounced. Women worry about running out of money in retirement or becoming a burden to their children.5 Healthcare costs are a concern for both genders. Nearly three-quarters of couples fret about being able to afford unexpected healthcare costs.6
Often the retirement goal or activity is different, but the value each of you is honoring is the same. Work may give your partner a creative outlet, while not working may provide you time to pursue your creative interests.
When discussing retirement planning, expect and validate feelings that arise. Don’t judge a partner for having more intense feelings than your own. Respect each other’s experiences — even if they are at odds. An empathetic advisor can be helpful at this stage by acknowledging the non-financial aspects to retirement and developing a plan that addresses these emotions. According to Morris, “Our job is to help our clients maintain a healthy perspective while validating their concerns and anxieties.” Like most money conversations, talking about retirement is not a one-time event. Instead, it is a series of conversations that happen over months, years, or even decades. It is easy to let daily life get in the way of looking ahead. But make a commitment to yourself and your family, and start the retirement money talk today. Sources 1 Economic Well-Being of U.S. Households in 2014, Board of Governors Federal Reserve System, May 2015. 2 Fidelity Investments Couples Retirement Study, Fidelity Investments, 2015. 3 Boomer Expectations for Retirement 2015, Insured Retired Institute, April 2015. 4 Fidelity Investments. 5 Women, Money and Power Study: Empowered and Underserved, Allianz, 2013. 6 Fidelity Investments.
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READER Q & A In this issue, we address reader questions about how to make the most out of open enrollment season at work, year-end tax planning, and expectations for the stock and bond markets in the years ahead.
It is time for open enrollment at work. What should I be thinking about as I make my benefit elections for the new year? The 2016 Aflac WorkForces Report found that 93 percent of employees choose the same benefits year after year, even when the benefits themselves change — sometimes significantly. The same study found that 57 percent of employees spent less than 30 minutes making open enrollment benefit decisions. These are shocking statistics considering that the choices you make during your employer’s open enrollment period can affect almost every aspect of your financial life. The benefit elections you make impact everything from retirement planning to life, health, and disability insurance to tax and estate planning — so don’t take them lightly. Some of the questions you may need to address include: • Am I taking full advantage of my employer’s retirement plan? • Should I be making Roth contributions? • Are my beneficiaries up to date? • Should I be using our health savings account (HSA) or flexible spending accounts (FSAs)?
£
• Do I need more life or disability insurance? • Are there new benefits that I should consider using? • Am I withholding enough in taxes? Make no mistake: open enrollment is a major event. Take the time to review and analyze your options every year and consult your professional advisors as needed. Continued on page 40
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Continued from page 39
We are coming up on the end of the year. Are there any tax-planning ideas that I should consider? While many investors believe their taxable income is out of their control, they can often exert some control with the help of their tax and financial advisors. Taking advantage of small tax-planning tactics can have a cumulative effect and may generate significant savings in the long term.
REDUCE TAXABLE INCOME Selling investments with unrealized losses this year is one way to reduce taxable income. Several sectors of the equity market, such biotechnology stocks, may present tax-loss-harvesting opportunities in 2016, but please consult your tax advisor about wash sale rule considerations before taking action. Gifting to charitable organizations is another strategy for reducing taxable income at the end of the year. Pre-funding planned charitable gifts may considerably reduce taxable income. And don’t restrict your thinking to gifts of cash. You may want to explore gifting appreciated securities as a way to both reduce income and avoid realizing gains.
INCREASE TAXABLE INCOME Despite being counterintuitive, increasing income in a given tax year may actually create tax savings in the long run if executed properly. This could be the case if you are in an abnormally low tax bracket this year, expect higher taxable income next year, or expect the sale of a business or a low-cost-basis asset in a future tax year. You may want to pull taxes forward by selling securities with unrealized gains—perhaps stocks or estate investment trusts that you have held for several years. And if you are years away from retirement, consider converting some or all of a traditional individual retirement account (IRA) to a Roth IRA. This can benefit investors who expect higher tax rates — or who expect to be in a higher tax bracket — when they retire. While you must pay income taxes on the converted amount, funds in the Roth IRA will grow and can be withdrawn tax free so long as you wait five years and are at least 59½ years of age. Tax planning hasn’t become more fun in recent years, but it has become more important. Tax rates, especially for high earners, have gone up — bringing tax management back into vogue. As always, please consult your tax and financial advisors for help.
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Despite the doom-and-gloom predictions of many pundits, stocks and bonds have done pretty well this year. What do you see going forward? While returns for both stocks and bonds have been strong since the financial crisis (not just this past year), investors should prepare themselves for underwhelming results over the next few years. They may have to take more risk to achieve the level of returns to which they have become accustomed.
Capital Market Forecasts Five- to Seven-Year Return Expectations 6.93%
STOCKS Analysis of price-to-earnings (P/E) ratios is one way to estimate future returns. While it is a poor predictor of one-year returns, P/E is more reliable for longer periods. Our analysis of the P/E ratios for U.S. large-capitalization stocks (as measured by the Standard & Poor’s 500 Index) and their subsequent 10-year returns since 1970 suggests that investors should expect annual average returns in the mid-to-high single digits. This rough measure is in line with CAPTRUST’s forecast 6.9 percent return for large-cap stocks over the next five to seven years.
2.78%
U.S. Large-Cap Stocks
U.S. Core Fixed Income
Source: CAPTRUST Research
BONDS The 10-year U.S. Treasury yield has proven to be a reliable proxy of future fixed income returns, especially high-quality, investment-grade bond returns. With the 10-year Treasury yielding 1.6 percent (at the end of September), we believe investors should expect low-single-digit returns from their bonds in coming years. Over the next five to seven years, CAPTRUST forecasts an annual return of 2.8 percent for U.S. core fixed income.
If you have a question for the VESTED team, we’d love to hear from you and see if we can help. Please send your questions to us at VESTEDmagazine@captrustadvisors.com.
While returns for both stocks and bonds have been strong since the financial crisis, investors should prepare themselves for underwhelming results.
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GIVING BACK Triangle Hops for Hope For a second year, the CAPCommunity Foundation played a leadership role in the Triangle Hops for Hope fundraiser. This year, 22 teams and 20 companies paired up with 22 breweries to create unique casks of beer. Teams raised funds ahead of a tasting event at which they competed for awards, including Critics’ Choice, People’s Choice, and Most Money Raised. The event, held in early October at Raleigh’s Contemporary Art Museum, raised $45,000 for Children’s Flight of Hope, more than doubling last year’s fundraising total. CAPTRUST’s brewing team won the Critic’s Choice Award.
Des Moines Golf Marathon Colleagues from CAPTRUST’s Des Moines, Iowa, office (pictured right) played more than 100 holes of golf in one day and raised $12,000 to support worthy children’s charities.
Giving Update In addition to fundraising for The Children’s Home of Easton, the CAPCommunity Foundation has provided financial support to more than 60 children’s charities in 16 communities where CAPTRUST does business so far in 2016. Grant requests are generated by CAPTRUST employees, vetted, and approved by the CAPCommunity Foundation board to support causes aligned with the foundation’s mission to enrich the lives of children in communities we serve. Right: CAPCommunity Foundation Vice President Jennifer Liebel presents a $1,000 grant to Holly Richard, president and CEO of the Tammy Lynn Center for Developmental Disabilities.
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CAPTRUST colleagues enjoying the Hops for Hope event.
INDUSTRY INVOLVEMENT Des Moines Business Record’s Women of Influence In August, CAPTRUST was a key supporter, sponsor, and presenter at the 2016 Des Moines Business Record Women of Influence Awards. The annual awards celebrate the work of women who have made a difference. CAPTRUST had the privilege of presenting Eileen Wixted, owner and principal of Wixted & Company, with the Woman Business Owner of the Year award.
Above: 2016 Des Moines Business Record Women of Influence Awards, Eileen Wixted. Photo courtesy of the Des Moines Business Record. Below: PLANSPONSOR National Conference attendees stopped by CAPTRUST’s exhibit hall booth and left messages for The Children’s Home of Easton.
Fidelity Industry Panel
Rush Benton
Rush Benton, CAPTRUST’s senior director of strategic wealth, participated in Fidelity’s wealth management practice panel discussion in September in Atlanta. The industry-oriented panel focused on recent trends, developments, observations, and best practices crucial for successful wealth management firms.
PLANSPONSOR National Conference CAPTRUST participated as a speaker, sponsor, and exhibitor in June at the 2016 PLANSPONSOR National Conference, which is recognized as one of the industry’s leading events and forums for retirement and fiduciary issues. In addition, the firm was the exclusive sponsor and primary presenter of the Defined Contribution Plan Boot Camp series, which addressed concerns for more than 100 institutional plan sponsor representatives in attendance. CAPTRUST attendees used this event as an opportunity to raise money for its 2016 children’s charity of choice. For every attendee who stopped by our exhibit hall booth, the CAPCommunity Foundation is donating $25 to The Children’s Home of Easton, with a total conference donation goal of $5,000.
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RECOGNIZING COLLEAGUES Excellence Award
CAPTRUST Ranked Number One
Jason Croy was recognized at CAPTRUST’s second quarter Synergy meeting in July as the most recent recipient of the Excellence Award. Jason plays a lead role in strategic tax-planning efforts for individual wealth management accounts and is known for his incredible eye for detail. One comment made about Jason during the award presentation was:
In its July 2016 issue, Financial Advisor magazine ranked CAPTRUST number one among registered investment advisors in the U.S. in its annual survey and ranking. The magazine’s survey analyzes several growth and sustainability metrics. This ranking is a crowning achievement for CAPTRUST in light of the challenges many firms are facing with the Department of Labor’s fiduciary rule, lackluster and volatile capital markets, advisor succession woes, and the demand to invest in the technology and infrastructure necessary to service and grow client relationships.
“Jason always maintains a positive attitude, performing well under short timelines, executing projects to perfection, performing research and execution of projects without being prompted, and doing it all with a permanent smile.”
Dayton Business Journal’s Power 50 CAPTRUST Financial Advisor Kathleen Carlson was recognized as one of the Dayton Business Journal’s 2016 Power 50. This annual list identifies, profiles, and commends the Dayton region’s 50 most influential women — women who are invaluable leaders across a variety of roles and industries. Kathleen has nearly four decades of financial advisory experience working with highnet-worth individuals and retirement plan fiduciaries.
Atlanta’s Top 25 CAPTRUST’s Atlanta office was recognized as a Top 25 Financial Planning and Advisory Firm by the Atlanta Business Chronicle on its annual list and ranked eighth on the list by total assets under advisement. With nearly 100 years of combined experience, Vic Bell, Rick Bernhardt, and Drew McCorkle oversee more than $7 billion in client assets.
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Financial Times Top Financial Advisors Financial Times included six advisors from CAPTRUST in its annual Top 401 Defined Contribution Plan Advisors list. The list, which recognizes the top financial advisors who specialize in serving retirement plans, included CAPTRUST financial advisors: • • • • • •
Karen Casillas (Los Angeles, California) Dan Esch (Minneapolis, Minnesota) Todd Jones (Raleigh, North Carolina) Mike Pratico (Portland, Maine) Andrew Shimp (Des Moines, Iowa) Scott Wertheim (Philadelphia, Pennsylvania)
CAPTRUST GROWTH Over the summer, we added three new financial advisors to address the needs of CAPTRUST wealth management and institutional clients. Amanda Alge CFO of the Year CAPTRUST’S Chief Financial Officer Bonnie McCullough was included in the Triangle Business Journal’s 2016 class of CFO Awards winners. The CFO Awards honor outstanding financial executives who exemplify excellence as corporate financial stewards. Bonnie was the recipient for the large private company category. The 2016 award winners represent decades of experience in financial stewardship, demonstrate sound fiscal oversight, and positively impact the growth of their respective entities.
Triangle Business Journal’s Fast 50 The Triangle Business Journal again named CAPTRUST as one of the 50 fastestgrowing private companies in the RaleighDurham-Chapel Hill area. Fast 50 winners are selected and ranked based on a formula that counts revenue growth and profitability in the preceding three years (2013–2015). Recipients are recognized not only for bolstering top-line performance and profitability, but also recognizing their contributions to the dynamic economic fabric of the Triangle. Last year, CAPTRUST ranked number seven on the list.
Located in Doylestown, Pennsylvania, Amanda joins CAPTRUST as vice president, financial advisor and is responsible for providing comprehensive wealth management and retirement advisory services to high-net-worth investors, professional athletes, private foundations, and corporate executives. Amanda previously served as private banker at Wells Fargo and as a financial specialist at PNC. She earned her Bachelor of Science degree in psychology from Rutgers University.
Ryan Lee, AAMS®, CFP® Ryan joined CAPTRUST’s Dayton, Ohio, office as a vice president, financial advisor and is responsible for providing retirement plan advisory services to corporate fiduciaries, as well as comprehensive wealth management services to high-net-worth investors, private foundations, corporate executives, and business owners. Ryan served as a wealth management advisor at TIAA (formerly TIAACREF) and as an investment consultant with TD Ameritrade prior to joining CAPTRUST. He attended Ohio Northern University, where he earned a Bachelor of Science degree in business administration and business management.
Brian Pollard, CFP®, CLU, CWS® Brian is a vice president, financial advisor responsible for providing comprehensive wealth management to high-net-worth investors, private foundations, and corporate executives. He joins us in our Raleigh, North Carolina, headquarters. Brian has been in the industry since 1997 and most recently served as a senior wealth manager at USAA. Brian received a Bachelor of Science degree in business management from North Carolina State University.
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Todd Jones Senior Vice President, Financial Advisor
Jimmy Talton Senior Vice President, Financial Advisor
Ellen Crowley Vice President, Financial Advisor
We believe an investment advisory firm is only as strong as the people who create the advice. CAPTRUST was built on the belief that investors are best served by financial advisors who are motivated to focus exclusively on their clients’ best interests. Our commitment to independence and transparency has enabled us to grow from the entrepreneurial vision of our founders to become one of the largest independent investment advisory firms in the country. WEALTH MANAGEMENT SERVICES
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www.captrustadvisors.com 919.870.6822 | toll free: 800.216.0645 4208 Six Forks Road, Suite 1700 | Raleigh, NC 27609