Chicago Partners · 2020. 11. 25. · Duke's Fuqua School of Business / CFO Magazine Global Business Outlook slightly positive but trend is lower for Q3/Q4 of 2020 due to election

Confidential © 2019 Chicago Partners Wealth Advisors

Chicago Partners

First Quarter 2020 Interactive Conference Call


Housekeeping – Matt

Rational Funds Overview of Special Situations Income Fund – David Jelinek

Quote – Nick

Secure Act – John/Matt G/Patrick

QOZs - Nick

Yield Curve & Interest Rates - Jim

Economic Environment - Jim

Checklist for Optimal Recessionary Conditions – Matt F

Leading Economic Indicators – Matt F

Market Fundamentals – Jim

Client Questions & Q&A – CP Team

Closing Remarks

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Chicago Partners Conference Call

Confidential © 2019 Chicago Partners Wealth Advisors3

Rational Funds


Rational Funds


“The real key to making money in the stock market is not to

get scared out of the stock market.”

~Peter Lynch

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Chicago Partners Conference Call


New 10-Year Rule for Inherited IRAs, eliminating the “stretch” provision. There

are a few exceptions to this rule where a beneficiary may continue to “stretch” the

IRA over their lifetime. The new time limitation on inherited retirement accounts

also affects trusts named as the IRA or plan beneficiary.

The Required Minimum Distribution Begins at Age 72, not 70 ½. Those who

reached age 70½ in 2019 will need to continue to take required minimum

distributions in 2020, but the IRS may provide further guidance on this and you

may want to consult with your tax and financial advisor.

There is No Age Limitation on IRA Contributions. Therefore, if you plan on

working later in life and earning income, you can put additional money into a

traditional IRA.

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SECURE ActMajor Changes to IRA, 401(k), and Other Tax Provisions


The Act allows for a $5,000 Qualified Birth or Adoption Distribution. The

distribution is not subject to the 10% early withdrawal penalty. Of note, the $5,000

needs to be distributed during the one-year period beginning on the date of birth, or

the date on which the adoption of an individual under the age of 18 is finalized.

Annuity-Related changes allow employees to convert their retirement plan

savings into guaranteed lifetime income via annuities.

The Act includes Provisions to Encourage Small Business Adoption of

Retirement Plans. Provides up to $5,000 in credits for three years if a small

business adopts a retirement plan with an additional $500 if they adopt auto-

enrollment. The law also improves access to employer-sponsored retirement plans

by including not only employees who have worked more than 1,000 hours, but now

includes employees who has completed three consecutive years of service and

worked 500 hours each year.

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Qualified Education Expenses for 529 Plan Funds are Expanded for Student

Loans and Apprenticeships. The Act allows distributions for qualified education

loan repayments as a qualified education expense. Such distributions may be used

to pay the principal and/or interest of student loans and are limited to a lifetime

amount of $10,000. An additional $10,000 may be distributed as a qualified

education loan repayment to satisfy outstanding student debt for each of a 529

plan beneficiary’s siblings.

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Qualified Opportunity Zones (QOZ)


Yield Curve

December 27, 2019

December 27, 2009

December 27, 2000

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

1 MO 3 MO 6 MO 1 YR 2 YR 3 YR 5 YR 7 YR 10 YR 20 YR 30 YR


Fed Funds & Interest Rates on 01/07/2019


National Debt Clock

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Checklist for Optimal Recessionary Conditions

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Accelerating Inflation – No

Inverted Yield Curve – No, but is relatively flat

Employment Declining – No, ADP employment rose by 202,000 in

December vs 160k expected, unemployment rate remains at 3.5%

29 Months After First Rate Hike – No, Fed has cut interest rates

P/E Above 17 – Yes, 18.45

10 Year Treasury Above 6.6% (Normalized Rate of 4.0%) – No, it is

1.81%

Bonds More Attractive Than Stocks – No

Dividend Yield Decreasing – No, dividend yield slightly increasing


New Economy Indicator

Empire State Manufacturing 6M Ahead Technology Spending – Outlook much

higher than last quarter, up to 27.5. (Last Quarter: 6.5%)

Economic Survey Results

Duke's Fuqua School of Business / CFO Magazine Global Business Outlook

slightly positive but trend is lower for Q3/Q4 of 2020 due to election.

Conference Board Leading Economic Index

Bloomberg Chart – Page 3

CEO Confidence Index – CEO Confidence in the Economy 1 Year From Now

Bloomberg Chart – Page 4

Leading Economic Indicators


Leading Economic Indicator

US Conference Board Leading Index

Last Quarter:

112.10


Leading Economic Indicators

CEO Confidence Index – Economy 1 Year from Now

Last Quarter:

6.18


Market Return (RM) = E + Y + P/E

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Capital Markets Equation


Range of Returns by Calendar Year

The S&P 500 Stock Index 1939-2019

Source: Crandall Pierce





Dividends Historically Provided More Income than

Bonds on the Same Invested Amount


2019: Market Fundamentals

Year Value

2019 (Est*) 55.63

2018 53.75

2017 48.23

2016 45.08

2015 44.34

2014 40.61

2013 36.30

2012 32.90

2011 28.31

2010 25.07

2009 25.08

2008 32.64

2007 31.92

2006 29.81

2005 27.29

2004 24.70

2003 22.80

2002 21.48

2001 21.53

2000 22.60

1999 23.97

1998 23.89

1997 23.22

S&P 500 Dividend by Year

1997-2019 (Est*)

(4% Annualized Growth)


Dividends Historically Provided More Income than

Bonds on the Same Invested Amount





2019: Market Fundamentals


Capital Markets EquationMarket Return (RM) = E + Y + P/E


Interactive Client Q&A

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Q&A


Client QuestionBARRON’S ROUNDUP: Peter Lynch Sees ‘Triples’ in Oil, Gas Stocks

2019-12-21 18:29:22.27 GMT

By Hailey Waller

(Bloomberg) -- 2019 has been the worst relative year in

five decades for legendary investor Peter Lynch. The S&P 500 is

up 28.5% and his positive returns are nowhere near that, he

says. The stock-picking guru set a high bar running Fidelity’s

Magellan fund with a 29% annualized return from 1977 to 1990,

about double the S&P 500. Thirty years later, he’s eyeing

overlooked opportunities in oil, energy services and natural

gas, Barron’s says in its Dec. 23 issue.

Key takeaways:

* “Everybody’s assuming the world’s not going to use oil for the

next 20 years, or five years, or next year,” Lynch says, noting

that private-equity money wants out and banks want to cut back

their lending.

* “You wouldn’t know it from the stocks, but oil is 25% higher

than a year ago,” he says. Oil, energy services and natural gas

stocks can provide triples, he says, using one of his baseball-

derived “Lynchisms.”

~Ros Krasny

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Client Question

Iran is suggesting they will retaliate against the US with attacks on

military or infrastructure that supports military. How does this affect

MLP’s, pipelines, and the perception of the strength of this market?

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Chicago Partners 5 Step Process


IMPORTANT DISCLOSURE INFORMATION

Past performance may not be indicative of future results. Different types of investments involve varying

degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or

investment strategy (including the investments and/or investment strategies recommended and/or undertaken

by Chicago Partners Investment Group LLC (“CP”), or any non-investment related content, will be profitable,

equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual

situation, or prove successful. CP is neither a law firm nor accounting firm, and no portion of its services should

be construed as legal or accounting advice. Moreover, you should not assume that any discussion or

information contained in this presentation serves as the receipt of, or as a substitute for, personalized

investment advice from CP. Please remember that it remains your responsibility to advise CP, in writing, if there

are any changes in your personal/financial situation or investment objectives for the purpose of

reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose,

add, or to modify any reasonable restrictions to our investment advisory services. A copy of our current written

disclosure Brochure discussing our advisory services and fees is available upon request. The scope of the

services to be provided depends upon the needs of the client and the terms of the engagement.

Please Note: Rankings and/or recognition by unaffiliated rating services and/or publications should not be

construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if

CP is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed

as a current or past endorsement of CP by any of its clients. Rankings published by magazines, and others,

generally base their selections exclusively on information prepared and/or submitted by the recognized adviser.

Rankings are generally limited to participating advisers.

31

Disclaimer

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Chicago Partners · 2020. 11. 25. · Duke's Fuqua School of Business / CFO Magazine Global Business Outlook slightly positive but trend is lower for Q3/Q4 of 2020 due to election