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The Narmi Group Quarterly Newsletter the Federal Reserve Board Of The Narmi Group Quarterly Newsletter October 2016 The Federal Reserve Board of Governors left short term rates unchanged while noting that the case for increasing short term rates has strengthened. The Fed also noted that the balance of risk to the economy by raising rates had reached a near equilibrium. There were three Board members that dissented on this vote, indicating that the pressure is building within The Fed for a rate increase or increases in the near future. We believe The Fed also bought itself some time, waiting for the Presidential election to conclude before raising rates so as not to get in the crosshairs of either candidate on the political trail. All in all, this action or inaction does not seem to be a surprise when one thinks about the highly charged election season and the economy. The Fed is likely to start its job of more aggressively managing rates at the December 2016 meeting. However, we do not believe that rates will be increased aggressively, but only in moderation over an extended period of time, which will be frustrating for fixed income investors, but should continue to help the equity markets. What will the election bring? No one knows that answer for sure. Both candidates are proposing more fiscal spending on the part of Congress to rebuild infrastructure and create jobs. But we must remember that Congress controls the purse strings when it comes to government spending. Mrs. Clinton is labeled as more Progressive, whereas Mr. Trump is labeled as a Populist. They do have differing opinions on which direction the country should go, or should we say, which path they wish to lead us down. As investors, we need not focus as much as we think on the outcome of the election, but who the President-Elect appoints to key agencies such as Treasury, Commerce and Fed Chairperson. Corporations that we invest in need to know the regulatory environment they will operate in. As we’ve said before, Wall Street will figure out a way but they just need to know the rules. Consumers will continue to select the best product available for the perceived most reasonable price. The economy and our capitalistic system have been functioning quite well since 1776. We as a country have suffered through wars and depressions, changes of Administrations and policies, shifts of balance of powers in the judicial system and the Supreme Court, to name but a few concerns. As we watch this transition unfold, think of how great America is that we do this peacefully and we do it regularly. We’ve done it before and we’ll do it again as a nation. We believe the U.S. will continue to adapt and we as a country should continue to prosper. Stocks seem fairly valued at these levels, given the current low interest rate environment. If interest rates do begin a long steady increase, we will need to see an increase of profits at the corporate bottom line. We believe this is reasonable and doable. Our current GDP growth rate is approximately 1% annually and there are recent signs that it is ticking up to a 2-3% annualized growth rate. This is very good news and just what stocks need to further their advances. There are concerns around the world (as always) that we are watching, such as: ISIS, the Middle East as a whole, European growth or lack thereof, the rise again of Russia, commercial property values in the US and real estate prices in China once again. We are watching the Chinese Yuan as it enters into the International Currency Exchange program as well as the continuing outflow of funds from China to foreign currencies and investments. China appears to be getting “bubbly” in parts again as it attempts to prop up its economy. What should you be doing now with your investments? Examine your risk tolerance. Invest in quality companies and invest to your comfort level, ensuring that you are able to sleep soundly at night. Most importantly, enlist the services of Theresa Rynaski, our Certified Financial Planner, CFP™, to determine a plan of investments that are designed to meet your goals and objectives over a long term. In addition, feel free to call on anyone of our Group members for help or with questions. What’s going on in our world right now outside of the office? Jon & Candy have been busy with grandkids with their oldest now being a freshman in high school. Candy also recently celebrated her 50th high school reunion from Thomas Jefferson. Charlie & Melissa celebrated their 15th wedding anniversary this summer and this fall they have been busy in the evenings and on the weekends running the 4 kids to soccer, volleyball, gymnastics and softball. Theresa had a nice short visit from her son Alec in August who is stationed in Atsugi, Japan and serving on the USS Ronald Reagan. She keeps busy with her large extended family and has been enjoying a little traveling. Theresa will also celebrate her 50th birthday later this fall! Scott & Keely have immersed themselves in the many fall activities for their son and daughter, including Girl Scouts, Boy Scouts, basketball, and choir. This past July Scott & Keely also celebrated their fifteenth wedding anniversary. Jill is excited for autumn to begin, bringing in the beautiful fall foliage and cooler temperatures, which allows her to enjoy more activities outdoors, such as hiking, campfires and s’mores. Jill wrapped up her summer by taking a trip to South Dakota to visit Mount Rushmore, and the Crazy Horse Memorial. In closing, we live in interesting and historical times. There are many negatives one could dwell upon, but there are also many, many positives as we look around the world and compare ourselves economically and socially. We need to give ourselves some credit from time to time for being part of what makes our country great. We would only ask that you consider sharing some of your surplus with your local church, family, community or school. This is where the true dividends of life continue to be paid. Best wishes to you and your family and Thank You for your continued trust, Jon Narmi Charlie Narmi Theresa Rynaski,CFP® Director Vice President Vice President Scott Greenlee Jill Buckley Client Specialist Client Assistant Contact Us "I would like to talk to The Narmi Group" The Narmi Group 13609 California Street, Suite 400 Get the help you need to build Omaha, NE 68154 your wealth management strategy. Phone: 800-866-1010 Our website Talk to a Financial Advisor Past performance is not a guarantee of future results. Dividends are not guaranteed and are subject to change or elimination. The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The S&P 500 Index is a large-cap index and is a representative sample of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite index consists of over 4500 stocks traded over the counter. It represents many small company stocks but is heavily influenced by about 100 of the largest NASDAQ stocks. The index is value weighted and does not include income. It is not possible to invest directly in an index. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. If you do not wish to receive further Baird email announcements, reply to this email with "Remove Me" in the subject line. ©2016 Robert W. Baird & Co. Incorporated. 777 East Wisconsin Avenue, Milwaukee, WI 53202. 800-RW-BAIRD. rwbaird.com.MC-44618. .
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