The Compass Newsletter: Fall 2019

The Compass A QUARTERLY NEWSLETTER BY SCREAMING EAGLE WEALTH MANAGEMENT // FALL 2019

erik dullenkopf | wealth manager | certified financial plannerâ„¢ professional ca insurance license #0F97513

Note from Erik Reflecting on the twelfth year in my career I appreciate all the wonderful relationships I have established. Our clients have taught me numerous life lessons and we have experienced many highs-and-lows of life together.

I often admire their desire to focus on their family, faith, traveling and enjoying life.

Throughout the years, we have built a specialization working with clients having common goals, concerns and challenges. Most often these are late career members of the Energy or Agriculture industry who rely on us to handle all the complications of managing investments in retirement, minimizing taxes, protecting against the unknown, maximizing charitable giving and providing a lasting legacy. Their net-worth’s are usually somewhere between $2MM to $10MM with many moving parts. We recognize that by focusing on this specialization, we bring maximum value to families we serve.

Looking forward to 2020, we remain committed to being the most trusted advisor to the families we serve and prudently grow our community of client families.

Cheers to a happy, healthy future together!

MARKET COMMENTARY: Q3 POSITIVE MONTH CAPS OFF TURBULENT QUARTER

ECONOMIC FUNDAMENTALS WITHSTAND THE RISKS

These results came despite worsening fundamentals.

According to Bloomberg Intelligence, the S&P 500 is expected to show a year-over-year earnings decline of 3.2 percent for the third quarter, with analysts expecting 3.3 percent growth in the fourth quarter. From a technical perspective, all three major U.S. indices spent the month above their 200-day trend lines.

The housing sector was also strong. In September, homebuilder confidence increased to an 11-month high.

Strong homebuyer demand and low mortgage rates boosted sales, with new and existing home sales beating expectations. August marked the second straight month of year-over-year growth in existing home sales (Figure 1).

Nonmanufacturer confidence saw a rebound in August, and manufacturing output rose by 0.5 percent.

U.S. markets had a positive September. The S&P 500 returned 1.87 percent for the month and 1.70 percent for the quarter. The Dow Jones Industrial Average gained 2.05 percent for the month and 1.83 percent for the quarter. The Nasdaq Composite lagged with a 0.54 percent monthly gain and a 0.18 percent quarterly gain.

Many recent economic releases came in better than expected. August retail sales figures revealed 0.4 percent growth. Consumers have been driving the economic expansion for the past two quarters. Personal income grew by 0.4 percent in August, and August’s employment report showed wages up 0.4 percent on a monthly basis.

International stocks had a strong September but saw volatility earlier in the quarter. The MSCI EAFE Index for developed markets gained 2.87 percent for the month but lost 1.07 percent for the quarter. Emerging markets were up 1.94 percent during the month but dropped 4.11 percent for the quarter.

Technicals were mixed for international stocks. The MSCI EAFE Index fell below its trend line early in the month but recovered. The emerging markets index spent most of the month below the trend line.

Fixed income had a tough month, with whipsawing interest rates creating volatility. The 10-year Treasury yield started the month at 1.47 percent, rose to 1.90 percent, and finished at 1.67 percent.

BEWARE THE RISKS AHEAD

The Bloomberg Barclays U.S. Aggregate Bond Index declined 0.53 percent for the month but was up 2.27 percent for the quarter. High-yield bonds gained 0.36 percent in September and 1.33 percent for the quarter.

Despite positive fundamentals, risks remain. The uncertainty surrounding the impeachment proceedings may weigh on confidence and spending. Slowing job growth and declining consumer confidence figures should also be watched. Abroad, the U.S.-China trade war and Brexit could affect markets.

HEADLINES HIT MARKETS, BUT NOT MUCH

September was full of newsworthy events. There was a drone attack on Saudi oil facilities, but it had no sustained impact on U.S. equity markets. Oil prices spiked 20 percent, but they remain below levels seen a year ago.

Consumer spending growth has been healthy, and there are few signs of a slowdown. The rebound in service sector confidence and manufacturing output also indicates the fundamentals may be more resilient than they seem.

The U.S.-China trade war and Brexit made news. New negotiations between the U.S. and China were announced for October, which briefly drove up equity markets.

Brexit’s impact on international markets was minimal. The ongoing negotiations may be a source of future volatility for internationally developed markets, however.

Volatility is likely, but the healthy U.S. economic background should help calm fears of a sustained downturn. A well-diversified portfolio and a long-term view remain the best way forward in an uncertain world. Information according to Bloomberg, unless stated otherwise.

Certain sections of this commentary contain forward-looking statements based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict.

Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets. All indices are unmanaged and investors cannot invest directly into an index. The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. It excludes closed markets and those shares in otherwise free markets that are not purchasable by foreigners. The Bloomberg Barclays Aggregate Bond Index is an unmanaged market value-weighted index representing securities that are SEC-registered, taxable, and dollar-denominated. It covers the U.S. investment-grade fixed-rate bond market, with index components for a combination of the Bloomberg Barclays government and corporate securities, mortgage-backed pass-through securities, and asset-backed securities. Authored by Brad McMillan, CFA®, CAIA, MAI Managing Principal, Chief Investment Officer & Sam Milletter, Senior Investment Research Analyst, at Commonwealth Financial Network®. © 2019 Commonwealth Financial Network®.

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PRESENTED BY ERIK DULLENKOPF

Caring For An Aging Parent Caring for aging parents can be a difficult planning aspect to balance. If you are among the “Sandwich Generation,” you may be trying to support your aging parents as well as your own children. Today, individuals are living longer than before, so it is better to be prepared.

Erik’s mother Gail is featured above in addition to his wife’s late mother, Linda (right), on their wedding day.

Having The Conversation

Evaluating Your Parent’s Situation

The first step—and often the most challenging one— is to find out what your parent needs or expects from you. It’s always best to have this conversation before a crisis occurs. Also, keep in mind that your parent may resist discussing the topic at first. He or she has lived a long time without much assistance from you, and the transition to accepting your new role in his or her life may be bumpy. Understanding and respecting your parent’s wishes will go a long way toward smoothing the process. How will your parent deal with incapacity, the fear of becoming dependent, or the reluctance to burden you with his or her needs?

It may be difficult for you to evaluate your parent’s mental and physical capabilities or to locate community services to support his or her independence. If that’s the case, a geriatric care manager can be indispensable, particularly if you live some distance from your parent. This person can perform an in-home assessment, determine your parent’s housing needs, and recommend a plan of action. Your parent’s doctor should be able to refer you to a qualified geriatric care manager.

Can Your Parent Remain At Home?

Just because your parent can no longer care for his or her home doesn’t mean that he or she has to move. In fact, staying in one’s home may offer better support and social networks than moving in with one’s children. If your parent can stay safely alone, you may want to divide up the household chores among family members or hire someone to provide housekeeping, cooking, and personal care. Here are a few other items to consider:

Gathering Information and Documents

Create a list of emergency contact numbers, including your parent’s medical providers; religious leader; neighbors; friends; and financial, tax, and legal advisors.

You should also gather copies of legal documents, funeral plans, medical records, and medication information. Keep a list of investment, bank, and insurance accounts, in addition to the locations of safe deposit boxes, real estate deeds, and automobile titles. You may find it helpful to upload all of this information to a USB flash drive so that it’s readily available when you need it.

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Find out if Meals on Wheels is available in your area.

The organization’s volunteers deliver meals to seniors who can no longer cook for themselves.

Look into modifying your parent’s home to help with any physical limitations.

Install a security system to summon emergency personnel if necessary.

Call the local police department to find out if it offers a program to check on elderly residents. If not, churches often have a volunteer group dedicated to checking in on older parishioners.

Post important telephone numbers for contacting you,

For help approaching the conversation, see AARP’s family discussion guide on senior driving: www. aarp.org/home-garden/ transportation/we_need_ to_talk.

emergency services, and your parent’s doctor in a prominent location.

As your parent grows older, an assisted living facility or retirement community may be a better solution than living at home. Such residences provide additional benefits, such as transportation, access to medical personnel, and a richer social life.

Financial And Legal Issues

Another solution is moving mom or dad into your home. This is a big decision, and it may not be the best choice for every family. Ask yourself: • • • • •

As we age, we lose mental alertness. Due dates for bills pass, insurance policies lapse, and poor financial decisions may be made. Your elderly parent will likely need your assistance with his or her financial, legal, and medical matters.

Will living together put stress on your relationship with your parent or on your relationship with your family?

Can you afford to remodel your home to provide a comfortable and private environment for your parent?

Do you have the flexibility to provide transportation as needed?

Will other family members step in to help, both financially and physically?

Will other family members share the cost of adult day care?

Banking

Most banks offer automatic bill-payment services from checking or savings accounts—a convenient option if your parent is Internet savvy. Or your parent can give you responsibility for his or her finances by having bills and financial statements sent to your address. You might also consider a bill-pay service, which receives a copy of invoices and then requests your parent’s bank or financial institution send checks directly to payees.

Can Your Parent Continue To Drive?

If your parent is over age 75, takes medications, or both, his or her ability to drive a car may be impaired.

Of course, it’s difficult to know when parents have become a danger to themselves or others. Give your parent’s friends and neighbors your contact information and ask them to make you aware of any changes in his or her driving skills.

Or suggest that your parent accompany you for grocery shopping and other errands rather than driving alone. Many communities offer driver’s education courses that teach best practices for seniors (e.g., limiting drive time to daylight hours and good weather conditions, avoiding highway or high-traffic situations).

Investments And Insurance

If day-to-day management of your parent’s finances is too much for you to handle, talk to your financial advisor. He or she can recommend products that provide income on a regular basis, such as managed retirement income portfolios, annuities, or bonds. Your financial advisor can also propose cash-management solutions that allow your parent’s monthly social security, retirement plan, and annuity payments to be deposited automatically into an account. You can typically access these funds through a debit card, unlimited check-writing capabilities, and online bill-pay services—everything that a bank checking account offers.

Also review your parent’s existing life and longterm care insurance coverage and make changes if necessary.

Keep in mind that this may be a very sensitive topic for your parent. Many seniors view driving as essential to their independence and will resist giving up the car keys.

Legal Concerns

An elder law attorney can help you prepare documents to manage your parent’s health care and financial affairs. In fact, many states provide free legal 5

services to the elderly.

Your parent may wish to seek an attorney’s help in the following areas:

At your workplace, talk with a member of the human resources staff to find out if you’re eligible for unpaid leave under the Family and Medical Leave Act. Also ask about the availability of an employee assistance program (EAP). EAPs are intended to help employees deal with personal problems—including concerns about aging parents—that might adversely impact their work performance, health, and well-being.

Appointing A Health Care Representative

Without legal authorization from your parent, medical privacy laws prevent doctors from discussing his or her medical conditions with you. In addition to appointing a health care power of attorney, your parent may want to consider a living will, which provides instructions on how to manage treatment if he or she has a terminal or irreversible condition and cannot communicate.

Finally, seek the help of a financial planner. Besides reviewing whether your parent’s resources are sufficient to pay for care, he or she can help you determine how to balance your own goals with your parent’s needs.

Additional Online Resources

For further information on caring for an aging parent, you may find these online resources helpful: • ElderLawAnswers: www.elderlawanswers.com • National Association for Home Care & Hospice: www.nahc.org • My Medicare Matters from the National Council on Aging: www.mymedicarematters.org • State Health Insurance Assistance Programs: www.shiptacenter.org

Understanding the process for qualifying for government programs like Medicaid or veterans benefits. Don’t rely on the experiences of family or friends, as their situations may differ from your parent’s.

Reviewing and updating estate planning documents, including his or her will, durable power of attorney, and any revocable trusts. Besides the basic estate planning documents, your parent may wish to draft a letter outlining who will receive personal effects like jewelry and family heirlooms.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.

Erik Dullenkopf is a financial advisor located at Screaming Eagle Wealth Management, 305 S. Kalorama Street, Suite F, Ventura, CA 93001. He offers securities and advisory services as a Registered Representative and Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. He can be reached at 805.643.7700 or at erik@screamingeaglewm.com.

What About Taking Care Of You

© 2019 Commonwealth Financial Network®

Although caring for an elderly parent can feel overwhelming at times, you are not alone. Many local and national groups are available to support you in providing the care and services your parent will need.

To get started, visit the U.S. Administration on Aging’s Eldercare Locator at www.eldercare.gov, or call 800.677.1116.

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CONGRATULATIONS TO OUR VERY OWN KAREN JONES, CRPC ®!

Many of you know our Director of Client Services, Karen Jones, but you might not know that she has recently passed her Chartered Retirement Planning Counselor (CRPC®) designation!

estate planning. Karen was able to sit down and answer a few questions with regards to her testing experience:

How do you feel like this designation will help clients & the practice?

It gives me a broader understanding of the retirement planning process, the multiple components that can affect a clients’ retirement outcome. I believe this will help the clients by having the knowledge to be an additional resource to them for questions they may have when Erik is unavailable.

CRPC’s are focused on retirement planning. The CRPC program is developed with a focus on clientcentered problem solving. Gaining the designation showed that she displays in-depth knowledge of individuals’ needs both before and after retirement.

The College for Financial Planning describes the program as helping financial planners and advisers define and create a “road map for retirement” for their clients.

Were you nervous to take the test?

Yes! The test covers a wide spectrum of information, some I have hands on experience with, some I was learning for the first time. I get migraines under stress and was worried the test would trigger one.

What was the first thing you did after knowing you passed the test?

The CRPC covers the entire retirement planning process, including meeting multiple financial objectives, sources of retirement income, personal savings, employer sponsored retirement plans, income taxes, retirement cash flow, asset management &

Breathed a sigh of relief & then text both Erik & Jordan to share the good news.

Next time you see her, be sure to congratulate her on a job well done!

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Key Planning Dates: Remainder of 2019 Presented by Erik Dullenkopf

To help you manage your finances throughout the remainder of the year, we’ve put together a list of important financial planning dates. You can make them on your wall calendar, or, better yet, enter them into your virtual calendar (where you can also set up reminders to keep you on track).

OCTOBER Medicare Enrollment

October is open enrollment for Medicare Advantage Plans & Part D prescription drug coverage plans.

Employee Benefit Plan Enrollment

Open enrollment season begins in October for certain employee benefit plans. Take time to consider how much to contribute to a flexible spending account.

Early Decision / Early Action Deadlines for Non-Federal Financial Aid

The CSS/Financial Aid Profile application is available beginning October 1 for early decision and early action applicants who are applying for non-federal financial aid (most deadlines are early to mid-February). Search the Profile website (http://cssprofile.collegeboard.org/) to see which institutions require you to submit the Profile Form for financial aid consideration and research their priority filing dates.

NOVEMBER Student Loans

The grace period for May graduates is coming to an end.

Recent graduates still looking for employment may want to investigate their options for deferring payments.

DECEMBER Reporting A Loss On The Sale Of A Stock

A trade to sell a long position must be executed by the close of the last trading date of the current year. A short position closing trade must be executed so that the trade settles by the final trading day of the current year.

Screaming Eagle Wealth Management P: 805.643.7700

305 S. Kalorama Street, Suite F, Ventura, CA 93001 | E: erik@screamingeaglewm.com | W: www.screamingeaglewm.com

Erik P. Dullenkopf, CFP® (CA Insurance license #0F97513) is a Registered Representative and Investment Adviser Representative with/and offers securities and advisory services through Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered through CES Insurance Agency or Screaming Eagle Wealth Management.