In the wake of the last month’s events, we feel the need to address the global situation(s), as well as, give our outlook moving forward. As many of you know, for weeks now we have been calling for recessionary pressures to fuel heightened volatility and market retractions in equities. As of the date of this writing (July 18, 2016) we are only a few weeks into the United Kingdom’s (UK) vote to leave the European Union (EU), commonly referred to as Brexit. Friday, on the brink of Brexit, global markets retracted heavily. Our goal here is to give our opinion on what we believe will happen moving forward as a result of Brexit.

The question we have encountered the most is “will the market crash?” Well, that is a relative question and answer. So the best we can say is, it depends. It depends on what your definition of a crash is, it depends on what happens next, it depends on how long you want to look at the market, and it depends on what market you are referring to.

Before the Brexit, we believed we were possibly on the brink of a multi-year market recession, in US equities. We have believed for some time now that the US has been artificially held up with via quantitative easing (QE) and historically low interest rates. Our economy has yet to top 3% GDP growth in the past 10 years (, the first time ever in US history since being measured. We also believed the US has been heading into an earnings recession with higher real inflation than quoted by the Fed. This could possibly lead to stagflation. Further, we believed that this election period has been uglier and more unpredictable than any in recent history, and that the election could fuel uncertainty and fear. Uncertainly and fear, as you can imagine, are rarely good for the markets.

Lastly, we believed, and still believe, that markets are cyclical and that we are in the back-end of this bull market. Lastly, we constantly subscribe to a theory called reversion to the mean. Wikipedia defines this theory as a theory suggesting that prices and returns eventually move back toward the mean, or average. This mean or average can be the historical average of the price or return, or another relevant average such as the growth in the economy or the average return of an industry. This concept makes sense to most but we typically do not see it applied in their investment allocations. We have been in a bull market for 85 months now. Bull markets over the last 70 years have averaged 44 months in length ( Thus, we are flirting with double the average tenure in this current bull market.

Adding all of these factors, even if we are wrong and no recession happens, we don’t see a lot of upside in US equity markets. We also believe that the Euro currency could continue to fall versus the dollar due to the amount of spending within the European Union and the excess printing of Euro. Knowing that Greece was going to most likely need another bailout in a few weeks, we foresaw a falling Euro. As a result, we also see commodities doing very well over the next few years.

All of these outlooks were before the Brexit. As you can most likely deduct, we now feel more convicted that a bearish US equities market is on the horizon. We actually believe there is some strong international growth available, however, we must remind people that a sinking tide lowers all ships. In 2008, in our opinion, we should have learned how interconnected the global markets are now. This leads us to be very careful when looking at any equities right now.

The concerns surrounding the EU and the UK are not over. We could very likely see Scotland either leave the UK and go back to the EU, block the UKs Brexit vote (or attempt to), or even leave the UK and not join the EU. We could also see other countries within the EU decide to “jump ship” from the EU. As mentioned earlier, Greece is potentially going to have to have another infusion of capital to pay their debt coming due. The carryover of psychological effects surrounding the Brexit and subsequent EU Bond effects could also carry into U.S. investments as uncertainty could continue to rise. The ripple effect for global investments may be felt for decades.

Investment wise, we are not anticipating another 2008 hard and fast slide. Instead, we believe the next few years could look similar to the 2000-2002 bear market. Those years saw negative S&P500 returns of 10.14%, 13.04% and 23.37% respectfully ( If we are right and the markets are in store for multi-year contractions, then we don’t want you effected negatively. There are ways to preserve assets and possibly grow assets in markets like these. There are too many investment options to discuss here, and several suitability factors to consider, but just know you have options and we want to visit with you regarding them.

The opinions voices in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested directly. The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Stock investing involves risk including loss of principal. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Securities offered through LPL Financial, Member FINRA/SIPC.

Five Star Professional Awards the 2016 Five Star Wealth Manager Award to Jeremy Walker of Maverick Wealth Management

Exclusive recognition of Dallas/Forth Worth-area wealth managers.

Left to right: Kelly Montgomery, Client Services Director; Four-year winner Matt Hubbell, Wealth Manager; Four-year winner Jeremy J. Walker, CRPC®, AWMA®, Wealth Manager, President, Managing Member

Thank you for the faith and trust you enlist in us daily. We take great pride in protecting, growing and managing your assets, but we most value our relationships with each and every one of you.

Five Star Professional is pleased to announce Jeremy Walker, Maverick Wealth Management, has been chosen as one of Dallas/Fort Worth’s Five Star Wealth Managers for 2016.

Five Star Professional partnered with Texas Monthly to recognize a select group of Dallas/Fort Worth-area wealth managers who provide quality services to their clients. Jeremy Walker is featured, along with other award winners, in a special section of the August issue.

“Once my injuries became too plentiful to remain competitive, it became clear I was not going to play professional sports. I then went to college to do just this. Numbers and finance always came easy to me, and I loved the challenges of problem-solving. I was able to obtain my first degree (BBA) in financial planning and my second degree in insurance to help with comprehensive financial planning,” says Jeremy Walker of Maverick Wealth Management.

The Five Star Wealth Manager award program is the largest and most widely published wealth manager award program in the financial services industry. The award is based on a rigorous, multifaceted research methodology, which incorporates input from peers and firm leaders along with client retention rates, industry experience and a thorough regulatory history review.

“Thank you for the faith and trust you enlist in us daily. We take great pride in protecting, growing and managing your assets, but we most value our relationships with each and every one of you,” says Jeremy.

“Based on our evaluation, the wealth managers we recognize are committed to pursuing professional excellence and have a deep knowledge of their industry. They strive to provide exemplary care to the people they serve,” stated Dan Zdon, CEO, Five Star Professional.

The Five Star Wealth Manager award, administered by Crescendo Business Services, LLC (dba Five Star Professional), is based on 10 objective criteria: 1. Credentialed as a registered investment adviser or a registered investment adviser representative; 2. Active as a credentialed professional in the financial services industry for a minimum of 5 years; 3. Favorable regulatory and complaint history review (unfavorable feedback may have been discovered through a check of complaints registered with a regulatory authority or complaints registered through Five Star Professional’s consumer complaint process*); 4. Fulfilled their firm review based on internal standards; 5. Accepting new clients; 6. One-year client retention rate; 7. Five-year client retention rate; 8. Non-institutional discretionary and/or non-discretionary client assets administered; 9. Number of client households served; 10. Education and professional designations.

Wealth managers do not pay a fee to be considered or awarded. Once awarded, wealth managers may purchase additional profile ad space or promotional products. The award methodology does not evaluate the quality of services provided and is not indicative of the winner’s future performance. 2,471 Dallas/Fort Worth wealth managers were considered for the award; 678 (28 percent of candidates) were named 2016 Five Star Wealth Managers.

*To qualify as having a favorable regulatory and complaint history, the person cannot have: 1. been subject to a regulatory action that resulted in a suspended or revoked license, or payment of a fine, 2. had more than three customer complaints filed against them (settled or pending) with any regulatory authority or Five Star Professional’s consumer complaint process, 3. individually contributed to a financial settlement of a customer complaint filed with a regulatory authority, 4. filed for bankruptcy, or 5. been convicted of a felony.

For research methodology information visit

Link to original publication here.

Opportunity or Risk

So far this year, we’ve heard discussions and questions surrounding recessions, depressions, China, oil, and of course, elections. Which side of the aisle do you find yourself towards? Not the elections, but the reason for January being the worst 10 day start to a year in S&P 500 history (Standard & Poors Factset, J.P. Morgan). “China’s economy is slowing”, “Oil is crashing”, “It’s an election year” are common laments for we’ve heard for reasons the stock market falling. Have you found yourself reading, saying or listening to these statements? Arguably, they could all be correct, but as Winston Churchill profoundly noted, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

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Market Update : January 2016

This market update is intended for our valued clients to address domestic and global financial events and we encourage you to refer us to a family member or friend who may benefit from a conversation with us.
As you have no doubt heard from the financial press and media, we’re off to the worst beginning of a year in equities in stock market history. Putting that in perspective, at the time of this writing, January 12, 2016 the Dow Jones Industrial Average is hovering around 16,500, roughly the same levels we saw in August 2015. Not so bad really when put into the proper perspective. We’ve retrenched to a level where we’ve been fairly recently.

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