Provident Team Newsletter

The
SEPTEMBER
PROVIDENT
Connection
2016
A QUARTERLY NEWSLETTER
contents
1 Giving Back: Afternoon
Tea
2
Investors’ Clear Election
Choice: Stay Buckled In
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3 Checklist: Prep Your
Securities offered through LPL Financial. Member FINRA/SIPC.
4
Home For Fall
Summer Surge:
IRS Phone Scam
AFTERNOON TEA
Provident is proud to actively support a wide range of community
outreach programs. In July, we were once again honored to support the
Afternoon Tea; a community event hosted by the Boys Girls Club of
Oshkosh.
This year, Provident sponsored 5 young girls from the club to attend
the event. Joining the girls at the event were Provident advisors, Mary
P. Wiedenmeier, Brenda L. Rolli and Cassandra N.F Dorn. This year's
event speaker was Shannon Bahrke Happe, an American Olympic
freestyle skier and entrepreneur.
The Afternoon Tea program is for girls ages 6-11 and focuses on
developing positive character and leadership skills. Over 50 girls attended
six classes this summer focused on healthy lifestyles and character
development. The classes in the program covered a variety of topics
including healthy self-esteem, positive values, healthy lifestyles, setting
goals and proper manners.
To learn more about this event, visit www.bgcosh.org/special-events/cr-meyer-golf-outing/afternoon-tea.aspx.
1
THE ELECTION
STAY BUCKLED IN
DO ELECTIONS MATTER TO THE MARKETS?
The implications of elections for the global economy and
the financial markets are less significant than many
believe. Sure, the next occupant of 1600 Pennsylvania
Avenue may be promising certain policies that are more
beneficial than others (or not). But it is the 2 billion other
households around the world that will ultimately determine
the direction and strength of the global economy. And that
is what matters most for financial markets.
Consider January 20, 2009, when Barack Obama was sworn
in as our new president. We heard many investors say they
were going to stay on the sidelines, given Obama’s policy
positions.
Another commonly held myth is that the country in general
and financial markets in particular would be far better off if
the political parties were more cooperative and willing to
compromise to get more accomplished. The reality is that
the markets do better during times of government gridlock
in Washington, D.C. From 1901 to 2014, the DJIA posted
annualized returns of 7.0% during periods of divided
government, but only 4.6% annualized returns when we
had a unified government.
(See Exhibit 1).
At the time:
 The S&P 500 was trading at a historically cheap 12x
trailing 12-month earnings,1 a significant discount
compared with the long-term average of 16x;1
 Monetary policy was very accommodative, with the Fed
funds rate at 0%; and
 The leading U.S. economic indicators, following the
worst recession in decades, appeared to be
stabilizing.
Our founding fathers designed the government in a manner
that ensured gridlock, with three co-equal branches of
government and a strong federalist system. You see, their
greatest fear was tyranny, and nothing inhibits tyranny
more than gridlock! Our markets seem to agree with the
words of Henry David Thoreau, “that government is best
which governs least.”
So how did that work out? Stocks went on to return 200%
in the subsequent six years.2
EXPLODING THE MYTHS
Are national elections important? Yes. Do national
policies matter over time? Yes. Should these four-year election cycles govern your long-term investment
decisions? No. (See Exhibit 1)
WHAT INVESTORS SHOULD DO
As the election cycle plays out between now and
November, investors should sit back, grab a bag of popcorn
and enjoy the spectacle to come! However, they should
also stay “buckled in” to their long-term investment
strategy regardless of who sits in the White House.
As the chart shows:
 A $10,000 investment held in the Dow Jones Industrial
Average (DJIA) from 1945 to 2015 would now be worth
$1.3 million.
 On the other hand, if an investor owned stocks only
when his or her preferred political party held the White
House and sold when the other party was in power,
that same $10,000 would be worth about $1 million
less.
We may not know who the next president will be, but we
do know that 150 million American households and 2 billion
households around the world will have the greatest
influence on the global economy and the financial markets.
© 2016 OppenheimerFunds Distributor, Inc. All rights reserved.
1.Source: Bloomberg, 1950-2015.
2.Source: Bloomberg, 1/20/09-5/21/15.
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2
FALL
TO-DO LIST
PREP YOUR
HOME FOR
FALL
EXTERIOR
 Drain, dry and store away all hoses
 Store away lawn mower and other yard tools
 Stock up on winter supplies like shovels, ice
scrapers and anti-freeze for the car, ice-melt, etc.
 Prep your snow blower; Take it in for a tune-up if
necessary.
 Wash and store away patio furniture
 Check porch and deck supports, stairs
and railings
 Clean and apply sealer to decks
 Caulk and seal windows and weather-strip
doors
 Seal any gaps or cracks in foundation or siding
 where critters could enter
 Repair or seal damaged or cracked window panes
 Check the foundation for cracks and seal any
iexposed cracks
 Inspect the roof for missing or loose
ishingles
 Remove and store screens
 Install storm windows and doors
INTERIOR
 Rake leaves and fertilize patchy grass with a high
oophosphorous mix to ensure healthy grass in the
oospring
 Plant any spring flowering bulbs
 Properly prune and cover any plants and/or bushes
v if necessary
 Clean gutters and downspouts
 Direct all downspouts and drainage away from your
oohouse
 Turn off water to all outdoor water valves






Remove, clean and store air conditioners
Caulk and seal windows
Change the direction of ceiling fans
Replace batteries in all smoke detectors
Have heating system checked and vents cleaned.
Replace furnace filter
 Have your fireplace and chimney cleaned and
iiinspected
3
VALUE
Summer Surge in IRS Scam Phone Calls
knowing the telltale signs is the best way to avoid
becoming a victim.
The IRS will never:
 Call to demand immediate payment over the phone,
oonor will the agency call about taxes owed without
iiiifirst having mailed you a bill.
 Threaten to immediately bring in local police or other
ilaw-enforcement groups to have you arrested for not
ipaying.
 Demand that you pay taxes without giving you the
iopportunity to question or appeal the amount they iii
iiiiiisay you owe.
 Require you to use a specific payment method for
your taxes, such as a prepaid debit card, gift card or
wire transfer.
 Ask for credit or debit card numbers over the phone.
The Internal Revenue Service has seen a recent increase
of IRS impersonation scams in the form of “robo-calls”
where scammers leave urgent callback requests to settle
their “tax bill.” Once the victim calls back, the scammers
may threaten to arrest, deport or revoke the driver’s
license of the victim if they don’t agree to pay.
If you get a phone call from someone claiming to be from
the IRS and asking for money and you don’t owe taxes, do
In the latest trend, IRS impersonators are demanding
not give out any information and hang up immediately.
payments on iTunes and other gift cards. The IRS reminds Then call TIGTA at 800-366-4484 to report the call or
taxpayers that any request to settle a tax bill by putting
contact the IRS directly at 800-829-1040.
money on any form of gift card is a clear indication of a
scam. Since these bogus calls can take many forms and
©2016 Internal Revenue Services. IRS.gov.
All rights reserved.
scammers are constantly changing their strategies,
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