Page 1

June, 2017

I

COMPARING FUND’S FIXED INCOME YIELDS

ETFs CLOSING: WHAT CAN AN INVESTOR DO?

By Louis P. Stanasolovich, CFP®, CCO, CEO and President of Legend Financial Advisors, Inc.® and EmergingWealth Investment Management, Inc.®

By Louis P. Stanasolovich, CFP®, CCO, CEO and President of Legend Financial Advisors, Inc.® and EmergingWealth Investment Management, Inc.®

nvestors often compare yields between different funds [not only open-end mutual funds, but ExchangeTraded Mutual Funds (ETFs) as well as closed-end mutual funds] to gauge the level of income they may receive from their investment. The 30-Day SEC Yield (The Securities and Exchange Commission mandated yield calculation) is a common calculation (more information about this calculation is

INVESTING: THE ROCKY ROAD AHEAD!

While Exchange-Traded Funds (ETFs) have enjoyed explosive growth over the past decade – 127 have closed down in all. Will the pace of closures slow down? It’s doubtful! Why is this happening? Listed below are the larger trends: 1. Lower Fees: As new funds are being introduced, one trend that has

Comparing Mutual Funds Fixed Income Yields, continued on page 12

ETFs Closing, continued on page 10

2017 SECTOR PERFORMANCE IS MIXED THROUGH JUNE 30TH

GRAPPLING WITH A STRONG U.S. DOLLAR OUTLOOK:

By James J. Holtzman, CFP®, CPA, Legend Financial Advisors, Inc.® and EmergingWealth Investment Management, Inc.®

By Scott Opsal, Director Of Research, The Leuthold Group, LLC

Most of 2017’s Sectors have performed in bursts, with the exception of Health Care and Technology, due to a twomonth market lull in March and April. Although the chart on page 4 shows good results for several sectors, Industrials and Materials have slowed considerably over the last few months. Energy has performed worse than any other sector as the price of oil and natural gas drops. Telecommunications has been weak since the beginning of the year due to lack of profit growth. Financials started out strong, but have faded badly in the last few months. Sector Performance, continued on page 4

Strong U.S. Dollar Detracts From Overseas Investment Returns

This article examines if a stronger U.S. Dollar translates into higher local-market (in the home country) stock prices for non-U.S. companies and whether this local strength counteracts the negative transactional impact of the higher U.S. Dollar. Profitable investing overseas requires not one, but two, successful decisions: 1. Select an outperforming asset class; and, 2. Be in a currency that provides a favorable foreign exchange impact. Grappling With A Strong U.S. Dollar Outlook continued on page 6 THE GLOBAL INVESTMENT PULSE, June, 2017

1


ABOUT LEGEND FINANCIAL ADVISORS, INC.®

Legend Financial Advisors, Inc.® (Legend) is a Non-Commission, Fee-Only, Fiduciary U.S. Securities and Exchange Commission registered investment advisory firm with its headquarters located in Pittsburgh, Pennsylvania. Legend provides Personalized Wealth Management Services Including Financial Planning And Investment Management Strategies to affluent and wealthy individuals as well as business entities, medical practices and non-profit organizations as well as retirement plans. Legend and its award-winning advisors are Fiduciaries.

FIVE REASONS TO CHOOSE LEGEND 1. Legend is a Non-Commission, Fee-Only, Fiduciary advisory firm. Fee-Only means Legend is compensated exclusively by client fees. Unlike Legend, fee-based advisors and brokerage firms have numerous conflicts of interest due to the fact that they receive commissions. 2. Members of Legend’s Financial Advisory Team have been selected by National Publications such as Worth, Medical Economics and Barron’s more than 60 times as “The Best Financial Advisors In America”. 3. Unlike most advisory firms and all brokerage houses, Legend and its advisors have chosen to be governed by the Fiduciary Standard of Law. Fiduciaries are required to work in their clients’ best interests at all times. 4. Legend designs dynamic, creative and personalized financial planning and investment solutions for its clients. 5. Legend emphasizes low-cost investments where possible that are allocated and traded in an income tax-efficient manner.

ABOUT EMERGINGWEALTH INVESTMENT MANAGEMENT, INC.® EmergingWealth Investment Management, Inc.® (EmergingWealth), is the sister firm of Legend Financial Advisors, Inc.® (Legend) and is a Non-Commission, Fee-Only Securities and Exchange Commission (SEC) registered investment advisory firm. EmergingWealth provides Investment Management services to individuals as well as business entities, medical practices and non-profit organizations whose wealth is emerging. All investment portfolios are sub-advised by Legend. Both Legend and EmergingWealth share a common advisory team, Investment Committee and Fee Schedule.

LOUIS P. STANASOLOVICH, CFP®, EDITOR Louis P. Stanasolovich, CFP® is founder, CCO, CEO and President of Legend Financial Advisors, Inc.® (Legend) and EmergingWealth Investment Management, Inc.® Lou is one of only four advisors nationwide to be selected 12 consecutive times by Worth magazine as one of “The Top 100 Wealth Advisors” in the country. Lou has also been selected 13 times by Medical Economics magazine as one of “The 150 Best Financial Advisors for Doctors in America”, twice as one of “The 100 Great Financial Planners in America” by Mutual Funds magazine, five times by Dental Practice Report as one of “The Best Financial Advisors for Dentists In America” and once by Barron’s as one of “The Top 100 Independent Financial Advisors”. Lou was selected by Financial Planning magazine as part of their inaugural Influencer Awards for the Wealth Creator award recognizing the advisor who has made the most significant contributions to best practices for portfolio management. He has been named to Investment Advisor magazine’s “IA 25” list three times, ranking the 25 most influential people in and around the financial advisory profession as well as being named by Financial Planning magazine as one of the country’s “Movers & Shakers” recognizing the top individuals who have done the most to advance the financial advisory profession. 2

THE GLOBAL INVESTMENT PULSE, June, 2017


RISK

By Stephen B. Blumenthal, Founder and CEO, CMG Capital Management Group, Inc. Return Potential: This chart shows the corrections and the length of days the corrections lasted. Circled in blue are the corrections by percent that occurred in the decade between 2000 and 2010 (left-hand side “Loss %”). For example, the 2001 correction was -30.0% and lasted 435 days. The 2000 to 2002 correction took the Stock Market down another -32.0% and lasted about 140 days. Collectively, that compounded to about -50.0%. The 2007 to 2009 correction was -55.0% and lasted about 355 days.

are still in a “Secular Bear” market that began on March 23, 2000.)

Also, take a look at the corrections in the 1980s (red circles) and the 1990s (light blue circles).

Source: This article was excerpted from “Thought – Word – and Action”, by Stephen B. Blumenthal, Founder and CEO, CMG Capital Management Group, Inc., (On My Radar, January 20, 2017), www. cmgwealth.com

Note that the mean correction for a cyclical bear market that exists within a larger secular bull market cycle is a -21.8% loss that takes an average of 211 days. Note too that the mean correction for a cyclical bear within a secular bear market cycle is a loss of -36.9% that took 371 days. It looks like we are still in a secular bull market cycle. (Editor’s Comment: Most “legendary” type investors believe we

COPYRIGHT 2017 CMG CAPITAL MANAGEMENT GROUP, INC. REPRINTED WITH PERMISSION OF CMG CAPITAL MANAGEMENT GROUP, INC.

A HISTORY OF BEAR MARKETS: DOW JONES INDUSTRIAL AVERAGE (1900 TO 2016) -10

1953 1984

-20

2011 1998

1923

1990 1934 1939 1962

-30

2016

1971

1960

1980

1949 1957 1947

1966

1914 1982 1978

1911 2001

2002

Loss %

-40

1970

1987

1933 1917

1942 1974

-50

1929

1921 1903

1907

1938 2009

-60

-70 Cyclical Bears within Secular Bulls Mean for Cyclical Bears within Secular Bulls (-21.8% Loss, 211 Days) Cyclical Bears within Secular Bears Mean for Cyclical Bears within Secular Bears (-36.9% Loss, 371 Days) Mean for All Bear Markets (-30.9% Loss, 307 Days)

-80

1932

25

50

75

100 125 150 175

200 225 250 275

300 325 350 375

400 425 450 475

500 525 550 575 600

625 650 675 700 725

750 775 800

Market Days As of: January 20, 2017 COPYRIGHT 2017 CMG CAPITAL MANAGEMENT GROUP, INC.

Source: S&P Dow Jones Indices, Ned Davis Research Calculations via CMG Capital Management Group, Inc. On My Radar, January 20, 2017, www.cmgwealth.com REPRINTED WITH PERMISSION FROM NED DAVIS RESEARCH AND CMG CAPITAL MANAGEMENT GROUP, INC.

PULSE THE GLOBAL INVESTMENT PULSE, June, 2017

3


Sector Performance, continued from page 1

The good news is Technology has continued its run that began in the Spring of 2016. Furthermore, Technology’s performance, unlike other sectors, has been affected by the ebbs and flows of the political markets. Health Care has had positive performance throughout 2017. Consumer Staples, Utilities and Consumer Discretionary have plodded along in 2017, but

have essentially matched the S&P 500’s performance to date.

COPYRIGHT 2017 LEGEND FINANCIAL ADVISORS, INC.®

A word of warning: Amazon’s fantastic stock performance has continued so far in 2017, which has had an enormous impact on the Consumer Discretionary Sector. The rest of the sector has not performed anywhere near as well as the overall market.

REPRINTED WITH PERMISSION OF LEGEND FINANCIAL ADVISORS, INC.®

2017 YEAR-TO-DATE SECTOR RETURNS THROUGH JUNE 29, 2017

S&P 500 Sector Performance 12/31/2016 - 6/29/2017 20.0%

Health Care

Information Technology

15.0%

Consumer Staples

10.0%

Consumer Discretionary Industrials

Materials

Utilities

Financials

5.0%

0.0%

-5.0%

-10.0%

-15.0%

Energy

Telecommunication Services

Source: Bloomberg, U.S. Global Research

PULSE

THE AMAZON EFFECT

By Doug Ramsey, CFA, CMT, Chief Investment Officer, The Leuthold Group, LLC Consumer Discretionary has historically proven to be the sector most vulnerable to Fed tightening, and we therefore suspected the 2014 Quantitative Easing (QE) “taper” might spell the end for its fantastic run. Instead, Discretionary, despite its year-to-date stumble, has handily outperformed since the end of QE in October 2014—rising 36.0% versus +21.0% for the S&P 500. This, however, hasn’t so much been the sector resisting the impact 4

of Fed tightening, but a single company: Amazon. Its stock is up 225.0% since the Fed ended QE, while the other 80-plus components of the S&P 500 Consumer Discretionary sector are up an average of just 8.0%. That’s reminiscent of the 200709 distortion in the Discretionary Index produced by a 5.0% bear market gain in Wal-Mart shares. Source: This article was excerpted from

THE GLOBAL INVESTMENT PULSE, June, 2017

“A Contrarian “Late-Cycle” Play”, by Doug Ramsey, CFA, CMT, Chief Investment Officer, The Leuthold Group, LLC, (Perception Express, June 7, 2017), http://leuth.us/ stock-market COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC REPRINTED WITH PERMISSION OF THE LEUTHOLD GROUP, LLC PULSE


Beta Sensitivity To 10-Year Real Interest Rates

FINANCIALS AND ENERGY OUTPERFORM WHEN INTEREST RATES AND INFLATION RISE

0.06

S&P 500 Sector Sensitivity To Inflation And Real Interest Rates

0.04 0.02

Financials

Info Tech Industrials

0.00

Consumer Discretionary

Health Care

(0.02)

Energy

Materials

Telecom Services Consumer Staples

(0.04) (0.06)

Utilities Real Estate

(0.08) (0.05)

(0.04)

(0.03)

(0.02)

(0.01)

0.00

0.01

0.02

0.03

0.04

Beta Sensitivity To 10-Year Breakeven Inflation As of: March 6, 2017 COPYRIGHT 2017 361 CAPITAL, LLC

Source: Goldman Sachs Global Investment Research via 361 Capital, LLC, Weekly Research Briefing, March 6, 2017, www.361capital.com REPRINTED WITH PERMISSION FROM 361 CAPITAL, LLC

BULL MARKETS USUALLY GO OUT WITH A BANG Price Performances And Cumulative Gains During Bull Markets Start

End

Annual Annual S&P 500 Price Percent Changes Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

20.0

38.6

17.2

18.0

05/17/47

06/15/48

06/13/49

08/02/56

42.1

11.9

13.1

(2.3)

10/22/57

12/12/61

31.0

9.7

(4.8)

27.6

06/26/62

02/09/66

32.0

17.9

10/07/66

11/29/68

32.9

6.6

05/26/70

01/11/73

43.7

11.1

(2.5)

Year 9

35.6

21.2

2.0

10/03/74

11/28/80

38.0

21.2

(7.1)

6.1

6.8

08/12/82

08/25/87

58.3

2.0

13.4

29.7

36.6

12/04/87

07/16/90

21.4

29.3

10/11/90

03/24/00

29.1

5.6

14.5

1.1

24.4

10/09/02

10/09/07

33.7

8.0

6.6

12.9

15.9

03/09/09

???

68.6

15.7

3.9

13.2

38.0%

13.0%

4.0%

13.0%

Average

Year 8

20.9

38.0

1.8

21.1

10.7

(4.3)

15.5

21.0%

22.0%

17.0%

9.0%

36.0%

Indices are unmanaged, statistical composites and their returns do not include the payment of any sales changes or fees an investor would pay to purchase the securities they represent. It is not possible to invest directly in an index. Back tested returns do not represent actual trading results and were constructed with the benefit of hindsight. Returns do not include payments of any sales changes or fees. Such costs would lower performance. Chart is provided for illustrative purposes. Prices exclude dividends. Data: 5/17/1947-1/25/2017.

As of: February 3, 2017 REPRINTED WITH PERMISSION FROM CMG CAPITAL MANAGEMENT GROUP, INC

Source: CFRA via CMG Capital Management Group, Inc., On My Radar, February 3, 2017, www.cmgwealth.com COPYRIGHT 2017 CMG CAPITAL MANAGEMENT, INC.

THE GLOBAL INVESTMENT PULSE, June, 2017

5


Grappling With A Strong U.S. Dollar Outlook continued from page 1

TABLE 1 3 Year Annualized Return

20 Year Annualized Return

Local

USD

USD-Local

Local

USD

USD-Local

Local

USD

USD-Local

6.1%

-2.5%

-3.6%

0.3%

0.5%

0.2%

1.4%

1.3%

0.0%

U.K.

5.4%

-4.4%

-9.8%

5.0%

0.3%

-4.7%

6.2%

4.5%

-1.7%

Germany

5.7%

-3.3%

-9.0%

4.7%

2.4%

-2.3%

6.7%

5.7%

-1.0%

Eurozone

5.7%

-3.3%

-9.0%

1.6%

-0.6%

-2.2%

5.9%

4.9%

-1.0%

EAFE

5.5%

-1.6%

-7.1%

2.2%

0.7%

-1.4%

4.6%

4.2%

-0.5%

Emerging

3.2%

-2.2%

-5.4%

4.7%

2.2%

-2.5%

8.7%

5.7%

-3.0%

Japan

As of: March 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC

It’s an ironic linguistic quirk that a stronger U.S. Dollar (USD) detracts from the returns earned by a U.S.-based investor, while a weaker U.S. Dollar provides a boost in overall returns. Valuation and technical indicators suggest that Developed and Emerging Markets are both attractive relative to the highly-priced domestic equity market. However, consensus opinion is that the U.S. Dollar will strengthen as U.S. interest rates rise; in fact, a stronger U.S. Dollar is said to be one of the most crowded opinions in the market today. A rising U.S. Dollar in 2017 would reduce the appeal of foreign equities and must be carefully considered before taking an overweight position overseas. The significance of currency’s impact on profitable overseas investing depends in part on one’s time frame. Currency effect has tended to even out over very long time periods, but measured over a handful of years (the time frame relevant to most investment decision-makers), currency is a meaningful factor. Table 1 presents local and U.S. Dollar based returns for several international markets through the end of 2016, and the currency influence is apparent. Keep in mind that the U.S. Dollar is relatively strong today, therefore the 2016 end-point for this data set is partially responsible for the negative results; concluding the study in other years would of course produce different spreads. (See Table 1 above.) 6

10 Year Annualized Return

THE GLOBAL INVESTMENT PULSE, June, 2017

Source: The Leuthold Group, LLC, Grappling With A Strong U.S. Dollar Outlook, March 7, 2017, http://leuth.us/special-interest REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

The U.S. Dollar’s recent strength has cost U.S. investors as much as 9.0% per year since 2013, and more than 2.0% per year over the last decade. The twenty-year window shows signs of mean reversion (back to average), but even 1.0% per year, compounded over twenty years, adds up to real money. Also, please note that although Emerging Markets have had occasional periods of currency strength relative to the U.S. Dollar, the long-term trend has been for generally weakening Emerging currencies, it would not be surprising to see the currency impact on Emerging Markets remain negative most of the time. Chart 1, on the top of page 7, illustrates the significance of the U.S. Dollar’s impact over shorter time horizons, showing the twelve-month rolling difference between U.S. Dollar returns and local currency returns for the MSCI Europe, Australia, Far East (EAFE) Developed Market index. With a mean (average) value near zero, wide swings are evident, and more than half of the months are outside a +5.0% to -5.0% band. Any factor that causes frequent performance differentials exceeding 5.0% within a year is worth noting and should be included in the decision-making process. Currency Offset Hypothesis: Given the market’s current sentiment, this report considers the negative impact of a

stronger U.S. Dollar. There are several ways investors can deal with the risk of a stronger U.S. Dollar including hedging, outright avoidance of international exposure, or simply accepting the consequences. This research examines one particular hypothesis that some rely on when evaluating their international allocations, described as follows: A stronger U.S. Dollar hurts U.S. investors by translating investment results back into fewer U.S. Dollars. However, a stronger U.S. Dollar also makes foreign companies more competitive vis-à-vis U.S. multinationals, and the improved competitive positioning of foreign companies will translate into higher profits and higher stocks prices, partially offsetting the translation impact. Improved business prospects could boost international stock prices and ameliorate the negative foreign exchange impact, leaving investors somewhat indifferent to the U.S. Dollar’s near-term movements. From the sample of international equity markets into periods of U.S. Dollar strength and U.S. Dollar weakness the returns were split. The annualized local returns, U.S. Dollar return, and the currency effects were calculated during both environments as shown in Table 2, on page 7. The research begins in 1973 and covers an average of six strong U.S. Dollar and six weak U.S. Dollar moves per market.

Grappling With A Strong U.S. Dollar Outlook continued on page 7


Grappling With A Strong U.S. Dollar Outlook continued from page 6

The U.S. Dollar/local translation effect is a given; when the U.S. Dollar strengthens, the U.S.-based investor suffers, and when the U.S. Dollar weakens, the U.S. investor benefits. What one may find surprising is the scale of these currency effects versus local market returns—often reaching double-digit levels. In many cases, the U.S. Dollar effect is larger than the local stock market return, such that in the short run it is perhaps more accurate to say investors are making a U.S. Dollar bet with a country bet thrown in, rather than the other way around! When measuring international returns over shorter windows of time the currency decision is as important as the equity decision, even more so. While these data points are helpful in emphasizing the importance of currency to overall return, it is the U.S. Dollar’s influence on local returns that appeals to one’s curiosity. Does a stronger U.S. Dollar, and thus improved competitiveness for non-U.S. companies, translate into higher local-market stock

CHART 1 40.0%

EAFE T12 MONTH RETURN SPREAD USD – LOCAL CURRENCY

30.0%

20.0%

10.0%

0.0%

-10.0%

-20.0%

As of: March 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC

Source: The Leuthold Group, LLC, Grappling With A Strong U.S. Dollar Outlook, March 7, 2017, http://leuth.us/special-interest REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

TABLE 2

Note 1: The 2008 global crash occurred during a time of U.S. Dollar strengthening and thus weighed on the averages for that environment. Excluding 2008 improves the strong U.S. Dollar results but only brings them to roughly even with the weaker U.S. Dollar local results. Germany does flip to a higher local return under strong U.S. Dollar regimes (versus flat) over all periods. Note 2: Emerging Market currency cycles have been longer than Developed Market cycles, such that only five total moves have to be considered. Thus, the results are based on a very small sample set. Furthermore, one of the U.S. Dollar strengthening cycles included the 2008 global crash–if that period is excluded then the local market returns appear roughly equivalent between the two USD environments. As of: March 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC

prices? Does this local strength counteract the negative transactional impact of the higher U.S. Dollar? Conversely, does a weaker U.S. Dollar diminish the business prospects of foreign companies such that the transactional windfall felt by U.S. investors is negated by poor local-market stock price performance? This currency offset hypothesis is conceptually sound and the economic drivers are easy to un-

Source: The Leuthold Group, LLC, Grappling With A Strong U.S. Dollar Outlook, March 7, 2017, http://leuth.us/special-interest REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

derstand. Therefore, it is quite surprising to see Table 2 suggest that what seems logical in theory has not followed through in reality. Focusing on the local return columns, we see that strong U.S. Dollar environments lead to positive local returns in all markets. The shocker is that for a number of markets, local returns were stronger during weak U.S. Dollar periods, scuttling the offset theory.

The far-right column of Table 2 compares the local market return in strong and weak U.S. Dollar environments. Only Japan and EAFE (of which Japan is the largest component) showed results consistent with the hypothesis. A stronger U.S. Dollar makes Japanese exporters more competitive and local returns were higher in this scenario, as expected. For European and Emerging Market companies, local

Grappling With A Strong U.S. Dollar Outlook continued on page 8

THE GLOBAL INVESTMENT PULSE, June, 2017

7


Grappling With A Strong U.S. Dollar Outlook continued from page 7

market performance was flattish or better in weak U.S. Dollar environments. Even though the weaker U.S. Dollar makes these companies less competitive internationally, their stock prices did not seem to suffer. Aside from the business impacts of a stronger U.S. Dollar, a flight to safety influence may also affect relative local returns. A stronger U.S. Dollar may draw funds into the U.S. (and Japan) as higher return safe havens, and away from lesser economies and Emerging Markets. The notion that a stronger U.S. Dollar can positively impact the stock prices of foreign companies and help offset the translational loss felt by U.S. investors does not appear to be a reasonable basis for “punting” on the U.S. Dollar call. Positive absolute returns are not large enough to counteract the double-digit drag of the rising U.S. Dollar; the investor cannot rely on the economics of international trade and competitiveness to bail them out of a stronger U.S. Dollar regime. Of course, in a falling U.S. Dollar environment the positive local returns combined with a currency tailwind make international markets absolute home runs. Currency-Hedged ETFs: The importance of U.S. Dollar moves on investment results has not been lost on investors, and the U.S. Dollar’s run in 2014 provides an interesting test case about investor behavior. The U.S. Dol-

lar index vacillated around 80 from 2007 until mid-2014, at which point it began a quick strengthening move up to 100 by early 2015, lopping 20.0% or more from international returns. In an attempt to counter this brutal headwind, investors flocked to currencyhedged ETFs to gain their international exposure, making them one of the top asset gathering classes in 2014 and 2015. (Currency hedged ETFs are a fairly recent innovation in the marketplace and held few assets prior to 2012.) Once the U.S. Dollar’s move topped out, investors retreated from these same funds, and the cash flowed out as rapidly as it had flowed in. Charts 2 (below), 3, and 4 (on page 9) present three of the largest currencyhedged ETFs. Each compares the monthly fund flows into or out of the ETF, along with the year-to-year change in the applicable U.S. Dollar exchange rate. In each case the U.S. Dollar’s strength resulted in massive inflows as investors escaped the hit of the negative translation. In Japan’s case, the U.S. Dollar weakened against the yen in 2016, triggering withdrawals from the currency-hedged Japan ETF. The U.S. Dollar’s 2016 weakening against the Euro was less pronounced at just 5.0%, but investors pulled assets just the same.

Chasing returns is the bane of unsuccessful investors, and the reactive fund flows in currency-hedged ETFs is a stark reminder that investor behavior hasn’t changed. There is merit in utilizing currency-hedged ETFs when the outlook is unfavorable and currency-hedged ETFs can be added to holdings when the U.S. Dollar outlook is particularly concerning. Recent trends, however, show investors to be reactive rather than proactive in dealing with currency risk. Research Takeaways: 1. Currencies are an important consideration for international investors, and return spreads between U.S. and local market indexes are often significant. 2. Local market returns have generally not counteracted the U.S. Dollar’s impact on returns measured in U.S. Dollar. 3. Currency-hedged ETFs are an effective way to remove the currency impact from the foreign investment equation. Fund flows into currencyhedged ETFs during the U.S. Dollar’s recent rise were coincident with (rather than anticipatory of) currency moves, as were outflows in 2016.

CHART 2 JAPAN CURRENCY-HEDGED ETF

3000

40.0%

Japan

2500

Monthly Fund Flows

20.0%

1500 1000

10.0% 500 0.0%

0

Year-Over-Year Change USD

30.0%

2000

-500 -10.0%

-1000 -1500 Sep-12 Jan -13

-20.0% May-13

Sept-13

Jan-14

May-14

Sep-14 Jan-15

Monthly Fund Flows $mil

As of: March 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC

8

May-15

Sep-15 Jan-16

May-16

Sep-16 Jan-17

USD Strength vs. Yen

Source: The Leuthold Group, LLC, Grappling With A Strong U.S. Dollar Outlook, March 7, 2017, http://leuth.us/special-interest REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

Grappling With A Strong U.S. Dollar Outlook continued on page 9

THE GLOBAL INVESTMENT PULSE, June, 2017


Grappling With A Strong U.S. Dollar Outlook continued from page 8

CHART 3 EUROPE CURRENCY-HEDGED ETF 35.0%

Europe

5000

30.0%

4000

25.0%

3000

20.0%

2000

15.0%

1000

10.0%

0

5.0%

-1000

0.0%

-2000

-5.0%

Year-Over-Year Change USD

Monthly Fund Flows

6000

-10.0%

-3000 Jan -14

May-14

Sep-14

Jan-15

May-15

Sep-15

Monthly Fund Flows $mil

As of: March 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC

Jan-16

May-16

Sep-16

Jan-17

USD Strength vs. Euro

Source: The Leuthold Group, LLC, Grappling With A Strong U.S. Dollar Outlook, March 7, 2017, http://leuth.us/special-interest REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

CHART 4 EAFE CURRENCY-HEDGED ETF 25.0%

EAFE

4000

20.0%

3000

15.0%

2000

10.0%

1000 5.0% 0 0.0%

-1000

Year-Over-Year Change USD

Monthly Fund Flows

5000

-5.0%

-2000

-10.0%

-3000 Jan -14

May-14

Sep-14

Jan-15

May-15

Monthly Fund Flows $mil

As of: March 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC

Sep-15

Jan-16

May-16

Sep-16

Jan-17

Change in Trade Weighted Dollar

Source: The Leuthold Group, LLC, Grappling With A Strong U.S. Dollar Outlook, March 7, 2017, http://leuth.us/special-interest REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

Source: This article was excerpted from “Grappling With A Strong U.S. Dollar Outlook”, by Scott Opsal, Director Of Research, The Leuthold Group, (Perception Express, March 2017), http://leuth.us/special-interest. COPYRIGHT 2017 THE LEUTHOLD GROUP REPRINTED WITH PERMISSION OF THE LEUTHOLD GROUP

PULSE THE GLOBAL INVESTMENT PULSE, June, 2017

9


ETFs Closing, continued from page 1

become very noticeable – lower fees – are being charged. It is the so-called race to the bottom (All types [Open-End, ETFs and ETNs (Exchange-Traded Notes)] of funds keep cutting their fees or starting new lower cost versions). As the number of ETFs grow (There are now 1,975 in the U.S. alone), it is highly likely consolidation will occur. Possibly, 127 ETFs closing in 2016 may seem like a small number in a few years. 2. Assets Will Flow To The Most Popular ETFs: While $2.6 trillion was invested in ETFs at the end of 2016, there is still a battle for assets. The funds that are the least expensive and invest in the most popular indexes will receive most of the assets. Furthermore, fast growth can be a problem for small ETF funds. It takes marketing for muscle (cash) investors to notice a new ETF among almost 2,000 other ETFs and 12,000 mutual funds. Obviously, such an effort will be difficult for a new ETF to achieve a critical mass. 3. What’s an ETF To Do - Close Or Merge?: As a result, many small ETFs will go out of business. After all, who would put more dollars into a small fund if they can’t achieve critical mass? Therefore, merging or closing seems like the answer. So often, closing an ETF is much simpler than merging with an ETF. Why? Mutual funds seem to merge all the time. Two ETFs under the same fund company, as a securities law requirement, need an agreement from shareholders of both ETFs that are to be merged. Therefore, proxies would need to be sent out. This effort is very costly and, therefore; probably won’t occur.

Mutual funds can be swept into another fund without shareholders voting on it. ETFs have what is called “exemptive relief” from some rules so they can trade on exchanges like stocks. However, mergers must be approved by a proxy vote. As a result, mergers of ETFs usually do not occur.

6. The Income Taxes:

Even big powerhouse ETF firms close ETFs. BlackRock’s iShares closed 10 ETFs in 2016 year, for example, while State Street closed 17.

7. Preventing Disadvantageous Results In A Liquidation:

4. Don’t Buy If A Shutdown Of An ETF Is Announced: When a fund company wants to close an ETF, there is a press release announcement that lists important dates prior to the actual liquidation of the ETF. Some of the actual liquidation might be two months or more in advance for others there may be only a few weeks depending on the fund group.

When the ETFs are sold, gains on the securities minus the losses might result in capital gains resulting in a tax bill. Please keep in mind, both long-term capital gains as well as short-term capital gains (taxed at ordinary income tax rates) will apply.

Either investors or their Fee-Only advisors or brokers can take steps to prevent unwanted outcomes concerning ETFs they own. Obviously, there is no guarantee that an ETF won’t be shut down, but trying to avoid an unpleasant outcome is certainly worthwhile. These include: a. Choose carefully—Avoid ETFs that follow a narrow niche or have non traditional financial market exposure. b. Avoid illiquid ETFs. Low trading volume often means there is scant interest in the ETF. c. Consider the company running the fund. Have they had success before? What are their governance policies? See what a research organization such as Morningstar thinks about the company or fund.

Common dates include the date new funds are no longer accepted, new, the date trading would be suspended and the dates that holdings will be liquidated. Generally, when an announcement of that ETF will close, usually bid-ask spreads widen. Almost always, the lighter a stock’s trading volume, the wider the percentage spread becomes between the bid and ask prices. Therefore, there isn’t much incentive for those investors who don’t already own the ETF to buy it.

d. Review the ETFs documents prior to investing. See if they say anything about liquidations and how the company running the fund intends to act in the event of a liquidation.

5. Who Pays The Cost Of Liquidation?: Generally, there are commissions, selling costs, filing costs and legal fees to pay. Sometimes, the fund group will pay the costs. Other times the existing shareholders are expected to pay. Then the assets are liquidated and the shareholders receive their share of what is left minus the above-mentioned costs.

COPYRIGHT 2017 LEGEND FINANCIAL ADVISORS, INC.® REPRINTED WITH PERMISSION OF LEGEND FINANCIAL ADVISORS, INC.®

OIL PRODUCING NATIONS CUT BACK ON PRODUCTION, U.S. INCREASES OUTPUT By Diane M. Pearson, CFP®, PPCTM, CDFA®, Legend Financial Advisors, Inc.® and EmergingWealth Investment Management, Inc.®

U.S. oil producers recently announced that they stepped up their “field production” of crude oil by +645,000 barrels a day (to 9.34 million barrels a day) over the six-month period from November 30, 2016 to May 31, 2017. They increased output due to a 1.8 million barrel a day cutback announced by 24 oil producing countries on November 30, 2016 . (Source: Department of Energy) 10

THE GLOBAL INVESTMENT PULSE, June, 2017

PULSE


“Do You Want A Second Opinion?” To see if your investment portfolio is built to navigate the pitfalls and opportunities ahead, call us today for a “Free Second Opinion” at (888) 236-5960

www.legend-financial.com THE GLOBAL INVESTMENT PULSE, June, 2017

11


Comparing Mutual Funds Fixed Income Yields, continued from page 1

discussed below) provided by bond funds. However, there are other calculation methods such as “distribution rates” or “trailing yields” that might be published by fund groups or fund publications. These calculations convey different information about each fund, which can help lead to better-informed investment decisions. Distribution rates are usually based on fund distributions paid over time—usually a 12-month period. The fund’s distributions per share are then divided by the fund’s price per share to arrive at a yield. This information gives investors an indication of how much the fund paid on an historical basis. One caveat: there is no standardized format, therefore, it is important to pay attention to how the calculation was performed. For example, the income portion of the calculation may utilize a recent one-month distribution or a year’s worth of distributions. Another alternative is using income distributions averaged over a longer time frame, although 12 months is most common. The distribution rate will then be less susceptible to erratic distributions, which could cause large swings in the yield calculation. The share price, also known as the principal, may differ as well. Morningstar®, an independent mutual fund rating service, calculates its Trailing Twelve-Month yield (They refer to it as TTM yield.) using a fund’s distributions during the past 12 months and the ending price for that time period. Another mutual fund rating service or fund group could use the same 12 month’s of distributions, but calculate a fund’s average fund price over that time frame. As a result, the yield figure will be more consistent over a period of time rather than using one price at a particular point in time. The U.S. Securities and Exchange Commission (SEC) developed the 30-Day SEC Yield as a standardized method for comparing bond funds. It reflects the dividends and interest “earned” (not paid)

12

by a mutual fund during the most recent 30-day period after deducting expenses. This value is multiplied by 12. It is then divided by the fund’s Net Asset Value at the end of the period. This provides a view of the income-producing potential for a portfolio based upon its recent holdings. It is important to remember this calculation is not based on actual fund distributions. It is a calculation that assumes the yield an investor would receive if the fund’s holdings and other components remain the same for the next 12 months. None of the various calculation methods guarantee future income or return to be earned. However, by analyzing a combination of the 30-Day SEC yield and the various distribution rates, it may provide a better idea of the fund’s potential. Another important point is if there is a negligible difference between the 30-Day SEC Yield and the 12-month distribution rate, then the portfolio’s holdings are likely yielding the same currently as they have been for months. This, of course, assumes that no large interest rate moves or other changes in the bond world have taken place. There can be, and usually are, differences between the different types of yields. Many of these differences could be caused at least partly due to the underlying assumptions contained within the calculations themselves. When there are significant differences due to the bond market or changes to a large degree between yield types, investors or the advisors should determine the underlying reasons. Furthermore, while monitoring yields is a great idea so investors can better understand what is occurring within their fund, it is a good idea to contact the fund company for more information. Portfolio changes occur for many reasons including, a strategic shift of the fund in response to economic conditions, impact from large cash inflows/outflows, defaults

THE GLOBAL INVESTMENT PULSE, June, 2017

on securities, etc., all of which can influence investment decisions. On an ongoing basis, investors or their advisor should determine if a fund will meet their needs in the future. For example, if interest rates fell during a 12-month period, investors would expect a decline in the yield of their bond fund as well. What if the yield did not decline and the fund’s current 30-Day SEC Yield is significantly higher than its 12-month distribution rate? This situation may indicate that the fund purchased higher-yielding securities with more credit risk, longer maturities, or both. Another possible explanation could be that the bond holdings in the portfolio declined in value more than the overall bond market. Again, contacting the fund itself for an explanation is a prudent course of action. The opposite situation can occur as well. Investors should expect their bond fund’s yield to climb after a period of rising rates. However, if the fund’s 30-Day SEC Yield was significantly lower than the 12-month distribution rate, two possibilities could arise: lower-yielding securities could have been added to the portfolio or the portfolio may have been more highly concentrated in a sector where significant price appreciation may have occurred relative to other sectors. Portfolio adjustments are inevitable over time, and investors should regularly review their holdings to make sure their objectives and risk tolerance are being met. COPYRIGHT 2017 LEGEND FINANCIAL ADVISORS, INC.® REPRINTED WITH PERMISSION OF LEGEND FINANCIAL ADVISORS, INC.® PULSE


MONTHLY RISK AVERSION INDEX (RAI)

RISK INDEX DECREASES TO NEAR LOWEST LEVEL EVER Note: The Risk Aversion Index combines ten market-based measures including various credit and swap spreads, implied volatility, currency movements, commodity prices and relative returns among various high- and low-risk assets.

4

4

3

3

2

2

1

1

0

0

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Source: The Leuthold Group, LLC, Perception Express, June 7, 2017,

As of: June 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC

http://leuth.us/bond-market

REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

U.S. SMALL CAP TO U.S. LARGE CAP HISTORICAL PRICE TO EARNINGS (P/E) RATIO U.S. Small Cap Valuations Cheaper Than U.S. Large Stocks By 2.0%

120

Based on Non-Normalized Trailing Operating Earnings Small Cap: Leuthold 3000 Small Cap Large Cap: Leuthold 3000 Large Cap

Small Cap P/E Premiums Small Cap P/E > Large Cap P/E

120

110

110 Median Premium of 3.0%

100

100

90

90

80

80

70

70 Small Cap P/E Discounts Small Cap P/E < Large Cap P/E

60

60 1983

1986

1989

1992

As of: June 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC

1995

1998

2001

2004

2007

2010

2013

2016

Source: The Leuthold Group, LLC, Perception Express, June 7, 2017, http://leuth.us/market-internals REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

THE GLOBAL INVESTMENT PULSE, June, 2017

13


SECULAR BEAR MARKET WATCH April 1, 2000 to May 31, 2017 (17 years and 2 months) Annual Compound Return

Total Return

Consumer Price Index (Inflation)

2.10%

42.95%

90-Day Treasury Bills Index-Total Return

1.56%

30.52%

Barclays Aggregate Bond Index-Total Return

5.16%

137.44%

High Yield Corporate Bond Index – Total Return

9.15%

349.73%

S&P Leveraged Loan Index – Total Return

4.97%

130.24%

HFRX Global Hedge Fund Index

2.43%

51.07%

S&P 500 Index (U.S. Stock Market)

4.82%

124.62%

MSCI EAFE Index (Developed Foreign Equities)

3.57%

82.78%

MSCI Emerging Market Index (Equities)

6.89%

213.98%

Newedge CTA Index (Managed Futures)

4.66%

118.83%

Dow Jones–UBS Commodity Index-Total Return (USD)**

-1.01%

-15.93%

Dow Jones U.S. Real Estate Index-Total Return (USD)**

10.71%

474.55%

9.25%

356.90%

Gold Bullion As of: May 31, 2017

SECULAR BEAR MARKET WATCH (CONTINUED) April 1, 2000 to May 31, 2017 (17 years and 2 months)

Compound and Total Returns include reinvested dividends. MSCI Indexes do not include dividends prior to 2002. Newedge Index is equally-weighted. COPYRIGHT 2017 LEGEND FINANCIAL ADVISORS, INC. ® ** USD = U.S. Dollar REPRINTED WITH PERMISSION OF LEGEND FINANCIAL ADVISORS, INC. ® Source: Bloomberg Investment Service

Note: During Secular Bear markets U.S. Stocks have historically returned a little more than inflation or a little less than inflation—plus or minus 1.50%—and generally last between 15 to 25 years. The last Secular Bear market (1966 to 1982) lasted 17 years and underperformed inflation by approximately one-half of one percent per year. The other Secular Bear markets since 1900 were 1901 to 1920 and 1929 to 1949. In both cases, the U.S. Stock market outperformed inflation by approximately 1.50% per year. All of the aforementioned performance numbers are pre-tax. The performance of the U.S. Stock market so far in the current period (April 1, 2000 to the present) certainly appears to indicate that we are in a Secular Bear market. Long-term returns (over the next 10 years) for the S&P 500 will probably be slightly worse than the last 17 years and 2 months. Current 10 year normalized P/Es (long-term valuations) indicate approximate annual compound returns of slightly less than 3.00% over the next 10 years. Of course during the next 10 years, returns during various periods will be significantly higher and lower than the expected return. For example, the more the stock market rises in the near term, the less returns after that period will be and vice versa. 14

THE GLOBAL INVESTMENT PULSE, June, 2017


2017 YEAR-TO-DATE PERFORMANCE January 1, 2017 to May 31, 2017 (5 months) 2017 Year-To-Date Return Consumer Price Index (Inflation)

1.37%

90-Day Treasury Bills Index-Total Return

0.29%

Bloomberg Intermediate Term Corporate Bond Index

3.77%

Barclays Aggregate Bond Index-Total Return

2.38%

High Yield Corporate Bond Index – Total Return

4.23%

S&P Leveraged Loan Index – Total Return

1.98%

HFRX Global Hedge Fund Index

2.34%

S&P 500 Index (U.S. Stock Market)

8.66%

MSCI EAFE Index (Developed Foreign Equities)

14.39%

MSCI Emerging Market Index (Equities)

17.32%

Newedge CTA Index (Managed Futures)

-0.02%

Dow Jones–UBS Commodity Index-Total Return (USD)**

-5.35%

Dow Jones U.S. Real Estate Index-Total Return (USD)**

3.77%

Gold Bullion

10.45%

As of: May 31, 2017 Compound and Total Returns include reinvested dividends. Newedge Index is equally-weighted. ** USD = U.S. Dollar COPYRIGHT 2017 LEGEND FINANCIAL ADVISORS, INC. ® Source: Bloomberg Investment Service

REPRINTED WITH PERMISSION OF LEGEND FINANCIAL ADVISORS, INC. ® THE GLOBAL INVESTMENT PULSE, June, 2017

15


SINCE 2000 EXPENSIVE VALUATIONS PROVIDE POOR PERFORMANCE

Starting S&P 500 Median Price-To-Earnings (P/E) Ratio And 10-Year Returns Starting Date

Starting Median P/E

10-Year Annualized Return

December 31, 1989

13.9

15.28%

December 31, 2000

20.6

-0.48%

December 31, 2001

23.5

0.92%

December 31, 2002

18.8

4.94%

February 28, 2003

16.9

6.06%

December 31, 2003

21.2

2.17%

December 31, 2004

20.3

5.54%

December 31, 2005

19.0

5.24%

December 31, 2008

12.5

13.21%*

February 28, 2009

11.0

16.69%*

January 31, 2017

22.9

???

* Less than 10 years (through December 2015) As of: June 10, 2017 REPRINTED WITH PERMISSION FROM CMG CAPITAL MANAGEMENT GROUP, INC.

16

THE GLOBAL INVESTMENT PULSE, June, 2017

Source: CMG Investment Research, Ned Davis Research, Worldscope via CMG Capital Management Group, Inc., On My Radar, February 3, 2017, www.cmgwealth.com COPYRIGHT 2017 CMG CAPITAL MANAGEMENT, INC.


FED WATCH

STOCK MARKET INTERVALS

INTEREST RATES AS OF JUNE 21, 2017 Fed Funds Rate Range: 1.00% to 1.25% Fed Discount Rate:

Year-To-Date

Cap Weighted - S&P 500 (Regularly Mentioned)

+7.8%

1.75%

2017 UPCOMING FED MEETINGS SCHEDULE July 25-26 September 19-20 October 31/November 1 December 12-13

Equal Weighted Average S&P 500

+6.0%

Largest 25 Companies Average

+8.3%

Source: The Leuthold Group, LLC, Perception As of: June, 2017 Express, June 7, 2017, http://leuth.us/ COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC market-internals PRINTED WITH PERMISSION OF THE LEUTHOLD GROUP, LLC

2.50 The Leuthold Group Copyright® 2017

Earnings Reports April-May 2017 (Q1 2017 Results)

EARNINGS ADVANCE/DECLINE RATIO First Two Months Of Each Quarterly Period Based On Reported Earnings

2.25

2.00

SOFT LANDING

SOFT LANDING

AVERAGE 1.51

1.75

1.50

1.25

1.00 RECESSION

RECESSION RECESSION

0.75

0.50

0.25 84 85 86

87 88 89 90 91 92 93 94

As of: June 7, 2017

95 96

97

98 99 00 01 02 03

04 05

06 07 08

09 10

11 12 13

14 15 16

Source: The Leuthold Group, LLC, Perception Express, June 7, 2017, http://leuth.us/market-internals REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC

THE GLOBAL INVESTMENT PULSE, June, 2017

17


SMALL CAPS: Double-Digit Drops Are An (Almost) Annual Event

Year

Maximum Russell 2000 Intra-Year Decline

Year

Maximum Russell 2000 Intra-Year Decline

1979

-15.4%

1998

-36.9%

1980

-26.7%

1999

-12.2%

1981

-23.2%

2000

-26.8%

1982

-18.3%

2001

-26.7%

1983

-15.1%

2002

-37.5%

1984

-19.5%

2003

-13.2%

1985

-9.5%

2004

-14.7%

1986

-15.0%

2005

-10.8%

1987

-39.2%

2006

-14.1%

1988

-7.6%

2007

-14.1%

1989

-9.9%

2008

-49.5%

1990

-30.5%

2009

-33.3%

1991

-7.1%

2010

-20.5%

1992

-12.6%

2011

-29.6%

1993

-6.4%

2012

-12.9%

1994

-13.3%

2013

-5.4%

1995

-6.8%

2014

-13.2%

1996

-15.6%

2015

-16.4%

1997

-9.7%

2016

-16.0%

Median Average Max. Loss Min. Loss As of: April 7, 2017 COPYRIGHT 2017 THE LEUTHOLD GROUP, LLC 18

THE GLOBAL INVESTMENT PULSE, June, 2017

-15.1% -18.6% -49.5% -5.4%

Source: The Leuthold Group, LLC, Perception Express, April 7, 2017, http://leuth.us/stock-market REPRINTED WITH PERMISSION FROM THE LEUTHOLD GROUP, LLC


LEGEND FINANCIAL ADVISORS, INC.® & EMERGINGWEALTH INVESTMENT MANAGEMENT, INC.’S® INVESTMENT MANAGEMENT SERVICES Legend Financial Advisors, Inc.® (Legend) and EmergingWealth Investment Management, Inc.® (EmergingWealth) offer Personalized Investment Management Services to individuals and institutions. Investment portfolios are developed to match the client’s return and risk requirements, which are determined by the clients’ completion of a Risk Comfort Zone Questionnaire, with the guidance of a Legend Wealth Advisor or EmergingWealth Advisor, respectively. Each type of investment portfolio is managed to achieve the short, intermediate and long-term investment objectives of the client, as may be applicable.

INVESTMENT PROCESS Investment Portfolios: Unlike most financial advisory firms that offer one style of investment or portfolio type, we offer a wide array of investment portfolios that usually fit with the large majority of client needs. If necessary, we will create customized solutions as well. For the types of investment portfolios, please see our Investment Portfolios, Potential Return and Risk Spectrum Chart on the next page. For a detailed description of our portfolios, please contact Louis P. Stanasolovich, CFP®, founder, CCO, CEO and President of both firms for a confidential discussion at (412) 635-9210 or e-mail us at legend@legend-financial.com. Investment Research: Our Investment Committee performs extensive research to identify opportunities, mitigate risks and structure investment portfolios. Emphasis is placed on developing portfolios that maximize the potential return relative to the amount of risk taken. In-depth due diligence including face-to-face interviews in many instances with portfolio managers for open-end mutual funds is performed on each investment we select for a portfolio. Factors (both from a qualitative and quantitative standpoint) that we conduct a thorough analysis of each investment include, but is not limited to, liquidity (including the primary investment and/or the underlying investments, if utilizing pass through vehicles such as openend mutual funds or exchange-traded products), income taxation, all related costs, return potential, drawdown potential (historical declines from peak-to-trough), volatility and management issues (Anything having to do with the management team of a stock, open-end mutual fund or an exchange-traded product.). All portfolios for EmergingWealth are subadvised by Legend. Client Education: Education is very important to us. We are dedicated to educating each client about the different investment portfolio types and how they relate to market volatility, time horizons, and investment returns. It is our goal to ensure that the client understands and agrees with our investment philosophy. Furthermore, we assist each client in selecting a risk tolerance level with which they are comfortable. Ultimately, an investment portfolio is designed to meet the client’s objectives.

PERFORMANCE REPORTING Many investment firms only offer monthly brokerage statements, which provide minimal information; typically only account and investment balances. We, on the other hand, provide detailed quarterly reports that outline performance, income and management fees (among other items) in a simple, easy-to-read report. In addition, each performance report is sent with an extensive index page that illustrates the investment environment during the reporting period.

FEES To find out more about the fees for either Legend or EmergingWealth’s Investment Management services, please contact Louis P. Stanasolovich, CFP®, founder, CCO, CEO and President of both firms for a confidential discussion at (412) 635-9210 or e-mail us at legend@legend-financial.com. THE GLOBAL INVESTMENT PULSE, June, 2017

19


HIGHER

POTENTIAL RETURN

THE GLOBAL INVESTMENT PULSE, June, 2017

LOWER

20

For A Description Of Each Investment Portfolio Contact One Of Our Advisors

LOWER RISK (COLD BLUE)

LOWER VOLATILITY

®

®

Global Strategic Balanced 20.0% Equity 80.0% Fixed

Global Strategic Balanced 30.0% Equity 70.0% Fixed

Global Strategic Balanced 60.0% Equity 40.0% Fixed Income

RISK (VOLATILITY/STANDARD DEVIATION)

Global Strategic Balanced 40.0% Equity 60.0% Fixed

Global Strategic Balanced 50.0% Equity 50.0% Fixed Income

®

HIGHER VOLATILITY

Past Performance Does Not Guarantee Future Results

© 2014 Legend Financial Advisors, Inc. ® All Rights Reserved ©2014 Legend Financial Advisors, Inc.® All Rights Reserved

Global Strategic Balanced 70.0% Equity 30.0% Fixed Income

UltraSpeculative 100% Equity

Global Strategic Balanced 100% Equity

Legend MultiStrategy 100% Equity

High Quality 100% Equity

HIGHER RISK (BLAZING HOT)

Global Strategic Balanced 80.0% Equity 20.0% Fixed Income

The Portfolios In Red Despite Their Placement All Have Similar Potential Return And Risk Profiles

ALL PORTFOLIOS ARE MANAGED BY LEGEND FINANCIAL ADVISORS, INC.

MODERATE RISK (WARM)

LEGEND FINANCIAL ADVISORS, INC. AND EMERGINGWEALTH INVESTMENT MANAGEMENT, INC.'S INVESTMENT PORTFOLIOS, POTENTIAL RETURN AND RISK SPECTRUM S&P 500 Risk

The Global Investment Pulse June 2017 Issue  

The Global Investment Pulse June 2017 Issue