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Jim: Hi everyone today is Tuesday, October 4, 2016 and this is our weekly, midweek, market update call.

Today’s comments include some observations in the financial news as well as a review of our indicators that we work with to provide guidance for our portfolios. But first here with her topic for the month, is Bernice Murff, Bernie, what do you have for everyone today?

Bernie: Thank you Jim.

My topic for this month is Health Insurance. Each year around this time, whether you get your health insurance through your employer or a combination of sources in retirement, you are tasked with the challenge of comparing plans and trying to figure out what plan makes the most sense. I don’t know about you, but this isn’t something that I enjoy doing. It is a necessary evil so to speak. So, I thought that I would provide you with a quick

Checklist for Choosing/Comparing Health Insurance as I believe this task might be daunting for you as well.

Questions to ask:

• Do my current doctors accept this plan?
• I take a certain medication. How is that covered under this plan?
• Does the plan pay for your regular and necessary care, like prescriptions and specialists?
• What happens if I get sick when traveling abroad?
• What maternity services are covered?

Once you have answered these questions, you can compare the remaining choices side by side – looking at monthly premiums, deductibles, and copayments. For more detailed information on choosing and comparing plans, you can go to our website and open up the transcript for this call and we’ll post an article that can be reviewed. Next week I’ll discuss Health Care Costs in Retirement.

Jim: Thank you Bernie. If you have been wondering all along how the possible election debates may be influencing the stock market, you might be disappointed to find out it hasn’t. What does float up and down are biotech stocks and coal, depending on which candidate is doing the talking. But one asset class that is definitely an indicator is the peso/U.S. dollar currency ratio which declines in value when the polls are leaning in favor of Trump being elected and rises when the polls are in favor of Clinton being elected.* However I have heard Stan Harley of the Harley Market Letter, who studies Fibonacci numbers and believes in cycle changes in the markets feels that right around the election his cycle theory is showing vulnerability. As the Zen forecaster says, “We’ll see. . . .”

*Source: Market Technician’s Association Seminar at University of Richmond, September 13, 2016, featured speaker Stan Harley.

What you need to know about Deutsche Bank? The German bank has been fined by the US Justice Department. If the fine is the original 14 $billion, Deutsche Bank may be in trouble, but it may not be as bad if it ends up being negotiated to 4-5 $billion. The German bank’s stock is down around 50% this year and experiencing lots of volatility. In addition to being weakened in the competitive pricing of smaller state savings banks in Germany, in the United States the German Bank failed the Federal Reserve’s annual stress tests because there was concern that the German bank’s ability to measure risks is in jeopardy. Also, there has been a run on the bank. This is not a Lehman Brothers redux, as Deutsche Bank has access to the European Central Bank and is diversified in multiple ways. Some in the market feel this is déjà vu all over again and that has created the price fluctuations in the stock.

The last news item—all three are from a recent Wall Street Journal edition—is about, of all things, the lack of college saving by Gen-X parents for their children. Millennial parents are saving 60% more than their Gen-x counterparts. Some feel that that’s because Gen-x parents went through the great recession and experienced losses that their Millennial compatriots did not. In addition, the Gen-x parents are more likely to be in the “sandwich” generation, where they are taking care of parents and trying to fund their children’s college at the same time. The outcome is that Gen-x parents may end up paying for college more out of cash flow than savings and subsequently putting off retirement until a later date.

Our market indicators? A receding market yesterday has led into a slightly positive market today. The big group of stock indicators we follow are still positive and holding their own. As the indicators point to slightly higher risk, we therefore look at more conservative strategies; feel free to ask us about how we have accomplished that. We have also removed an investment or two from our portfolios in a housekeeping exercise. Our asset classes are ranked just like last week: Domestic equities, commodities and fixed income followed by international equities which is closing the gap on third place, then cash then currency trading being the last asset class ranked. Sectors? Well, oil and oil servicers are leading the 60-day timeline, followed by semiconductors and machinery and tools.

Interest rates? Still low, all three major maturities, the five, ten and thirty year treasury back where they were last week. Once again, these low yields are fostering the pursuit of low interest rate strategies in running a home or business. For further details contact us in the office. Bernice, I think that is about it, shall I un-mute the lines for questions?

Opinions expressed are not necessarily those of Raymond James & Associates. The author's opinions are subject to change without notice. Information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.

Information provided is general in nature, and is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security.

There is an inverse relationship between interest rate moments and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices rise.

Commodities are generally considered speculative because of the significant potential for investment loss. U.S. Treasury securities are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value.

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