SH&J Blog

Inside The Economy with SH&J: Housing Prices & Corporate Earnings

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On this week’s Inside the Economy with SH&J, we discuss the effects of lower mortgage rates on the housing market. Which region in the U.S. is seeing home prices increase at the fastest rates? The answer may surprise you. Corporate earnings have seen robust growth since 2017. What are most corporations choosing to do with the excess profits? Tune in to find out these answers, and more!

Sharkey, Howes & Javer Investment Process

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Investment Management is a very important part of our business here at Sharkey, Howes & Javer. Designing a custom investment portfolio is integral in helping our clients achieve their financial goals. Below is an outline of the investment process at SH&J, and an overview on how we choose investment portfolios for clients.


We first take a macro level view of the global economy and work to identify trends and how they could potentially impact clients’ portfolios. Macro economic research, as well as insights from various mutual fund managers and investment professionals, is used to determine what asset classes may add value to portfolios during various economic conditions.

The biggest driver of investment returns is the stock and bond exposure of a portfolio. The more stocks in a portfolio, the greater the long-term rate of return is expected to be. Portfolios can range from 100% stocks, which are the most aggressive, to portfolios that may have over 60% in bonds, which are more conservative by nature. We then discuss how much international stock and bond exposure is appropriate, and also evaluate if there are opportunities in alternative asset classes, such as real estate or commodities, for additional diversification.

Once the asset class allocation is outlined, the individual mutual fund or exchange traded fund (ETF) position for each asset class needs to be chosen. Third party investment research tools aid in scanning the entire fund universe. Many factors are considered in selecting each holding. Such as how long a fund manager has been managing a particular fund, what the fund’s underlying expense ratio is, how much risk the fund is taking compared to the benchmark, and if the fund has had consistent 3, 5, and 10-year performance numbers.

The economic conditions around the globe are fluctuating every single day. And, what’s also changing is the number of mutual fund and ETF options available for people to invest in. It is important to stay up-to-date on your investment portfolio and make adjustments as needed. If you would like to discuss your current investment portfolio or discuss our strategies, please contact Sharkey, Howes & Javer today to speak with a CERTIFIED FINANCIAL PLANNER™.

The economic conditions around the globe are fluctuating every single day. And, what’s also changing is the number of mutual fund and ETF options available for people to invest in. It is important to stay up-to-date on your investment portfolio and make adjustments as needed. If you would like to discuss your current investment portfolio or discuss our strategies, please contact Sharkey, Howes & Javer today to speak with a CERTIFIED FINANCIAL PLANNER™.

Inside The Economy with SH&J: Lower Interest Rates & Negative Yields

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On this week’s Inside the Economy with SH&J, we discuss the Federal Reserve meeting happening this week. It looks like the market is already assuming the Fed will cut interest rates, but how much lower could interest rates go in the future and what affect would that have on the economy? Speaking of low interest rates, there is now around $14 trillion in negative yielding debt around the world. What countries currently have the lowest interest rates and why are their citizens buying negative yielding bonds? Tune in to find out!

Meet Claire O’Neill

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Name: Claire O’Neil


SH&J team member since: September, 2018

How did you decide to become a financial planner?

I started out in the business working alongside financial advisors and through this experience fell in love with the idea of working more closely with clients. I decided to get a CFP® license so I could be a direct help in advising for their financial success.

What’s your favorite part of your job?

My favorite part of the job is working directly with clients and meeting new people along the way. Being able to take the stress off of people’s plate for major financial decisions and helping them navigate different scenarios is the best part of my day.

You’re originally from Kansas City, Missouri, so what brought you to Colorado and SH&J?

I had lived in Missouri my whole life, but have always had a soft spot in my heart for Colorado and the outdoor lifestyle, as Breckenridge was a family vacation destination growing up. After college, I was looking for a change of pace, so I packed up my stuff and moved to Colorado.

What do you like to do in your free time?

I spend a lot of time in the mountains hiking or skiing but if I’m not in the mountains you can find me hanging with my Spanish Water Dog, Hugo, in the parks or playing volleyball. Outside of outdoor activities, I love to explore restaurants and try new foods.

Do you have a favorite place you like to ski or hike?

Winter Park is my new favorite but Breckenridge is hands down my favorite mountain town. This is where my family vacation spot was growing up and is a longtime favorite city of mine.

What’s something about you that would surprise us?

I come from a really large Irish family (60+ counting aunts, uncles and cousins) so I have an unknown passion for Irish culture and music. My family enjoys listening to Irish bands in the Kansas City area and my cousin actually runs one of the biggest Irish events in the city.

What is the most interesting place you’ve ever been to?

Nice, France. It’s a small city by the ocean and I loved spending 5 days there before visiting my sister who was living in Barcelona. The food and atmosphere were amazing. You can walk everywhere and it had a really laidback vibe.

If money was not a factor, what would you do?

I would travel around the world and learn to speak a new language. I would also consider splitting my Colorado time between Denver and the Mountains.

Inside The Economy with SH&J: Unemployment & Fed Decision

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On this week’s Inside the Economy with SH&J, we discuss unemployment numbers. Job openings in May exceeded the number of people unemployed for the 15th straight month. Could there be a new natural rate of unemployment in a robust economy? Short term interest rates have already priced in an interest rate cut for July. What are the possible implications of the Fed’s decision at the upcoming meeting? Media bias aside, what is really going on with state and federal debt? Tune in to find out!

Why are my Medicare Premiums Increasing?

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For many people, Social Security and Medicare seem to go hand-in-hand. Both benefits are typically received during your 60s, and Medicare premiums are often deducted from monthly Social Security checks. So when the announcement came out at the end of 2018 that Medicare premiums were increasing for 2019, one day after the “Cost of Living Adjustment” of 2.8% was announced for Social Security, it’s hard to blame Americans for thinking they are one in the same. However, in reality, Medicare premium decisions are made by the Medicare system itself, not the Social Security Administration.

For 2019, the Centers for Medicare & Medicaid Services (CMS) announced a slight increase in Medicare Part B premiums from $134 to $135.50 per month, which is a little over a 1% increase. CMS bases their decision to adjust premiums on the inflation that they are seeing in the health care system. Although a majority of Americans on Medicare pay $135.50 per month for coverage, there are some people that fall subject to exceptions. Approximately 2 million individuals on Medicare pay less than the designated amount due to the “hold harmless” provision, which prevents your Medicare premium from increasing in a way that lessens your monthly Social Security benefit. Although this won’t save you much, the average person who qualifies for “hold harmless” pays about $130 per month for Medicare. On the flip side, 5% of Medicare recipients pay an income related surcharge. If you as an individual made over $85,000 in one year ($170,000 for married couples), you are subject to this surcharge which could cause you to pay anywhere from $189.60 per month, up to $460.50 per month, depending on your annual income. Something to note, the Medicare income surcharges are based off the last available tax return, so your 2019 calculation is based off income reported in 2017.

The small premium hike for 2019, along with future increases, may be here to stay. According to the Wall Street journal, monthly premiums could be expected to increase to $144.30 in 2020, a difference of $8.80 per month. This prediction is due to the rise of health care prices in an environment with stagnant inflation.

Do you or a family member have questions on changes to your Medicare premiums?

Contact Sharkey, Howes & Javer today to speak with a CERTIFIED FINANCIAL PLANNER™.

Inside The Economy with SH&J: Manufacturing Slowing & Emerging Trade Partners

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On this week’s Inside the Economy with SH&J, we discuss a slight slowdown in the manufacturing sector of the economy. Inventories and job cuts are increasing, but how important is manufacturing to the health of the overall US economy compared to service jobs? Could this play a role in whether or not the Fed decides to adjust rates? With the talk of tariffs affecting US trade with China, what other country in Asia has seen exports to the US increase? Tune in to find out!

Understanding Interest Rates (part 1) | Historical Highs and Lows

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Interest rates have a significant impact on your finances whenever you purchase an expensive item, such as a house or car. Interest rates have fluctuated a great deal over the past four decades as the ebb and flow of the economy has a direct impact on the prime interest rate.

History of the Prime Interest Rate

Individuals who have a perfect credit history qualify for what is known as the prime interest rate. Lenders calculate the prime interest rate by taking the federal funds rate and adding 3% to it. Most types of loans use the prime interest rate as their base. The prime interest rate hit an all-time high in 1980 when it was calculated at 21.5%. The all-time low was in 2008 when it was 3.25%.

History of 30-Year Mortgage Interest Rates

When most people start applying for mortgages, they opt for a 30-year mortgage. It takes a long time for them to pay for the house, but the smaller payments are more manageable, and many try to pay a little extra each month. As a general rule, the prime interest rate doesn’t have a huge impact on the amount of interest attached to this type of loan. The interest rate for mortgages is influenced by the bond market.

Historically, the interest rates on 30-year mortgages peaked in 1981 when the rate reached 18.63%. The lowest interest rates for 30-year mortgages was in 2012 when the interest rate was 3.31%.

History of 15-Year Mortgage Interest Rates

The downside to a 15-year mortgage is that the monthly payment is higher than 30-year payments, but there are still some compelling reasons to take out a 15-year mortgage. The first is that you’ll own your property free and clear in a relatively short period of time, provided you can manage the payments. The second big advantage is that the interest rates are a bit lower than the ones connected to 30-year mortgages. Historically, 15-year mortgage interest rates peaked in 1992 at 7.96%. The all-time low was in 2013 when home buyers were able to secure a 15-year interest rate at 2.56%.

Adjustable rate mortgages are the exception to the rule when it comes to mortgages. While 15 and 30-year mortgages are impacted by the bond market, adjustable rate mortgages are influenced by the prime interest rate. With this type of mortgage, lenders use the prime rate to determine the amount of interest attached to the loan. The rate fluctuates each time the Federal fund rates change. However, lenders do set a maximum cap on the interest rate attached to the adjustable rate mortgage.

Historic Interest Rates for Auto Loans

The most popular type of auto loans are 48-month and 60-month loans. The interest rate for 48-month auto loans peaked in 1981 when car buyers had to pay a 17.6% interest rate on their vehicle loan. The lowest interest rate was 4% in 2015. The highest amount of interest car buyers paid on their 60-month car loans was in 2007 when they were charged a whopping 7.82%. The lowest interest rate took place in 2014 and 2017. At the time the prime interest rate for 60-month car loans was 4%.

Why Historical Interest Rates Were Sky High in 1980

The overall economy is why the prime interest rate has fluctuated so much over the past four decades. When the economy is booming, the prime interest rate increases, however, when the economy slips towards a recession, interest rates decrease. This is because the Federal Reserve is trying to encourage people to spend money, which in turn is supposed to stimulate the economy out of a recession.

Inside The Economy with SH&J: Trade Uncertainty & The Importance of Bond Exposure

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On this week’s Inside the Economy with SH&J, we discuss how this week’s Fed decision could determine the future of inflation and bond prices. In a news-driven market, how will talks of trade negotiation and the upcoming election affect the S&P 500 in 2019? The U.S. stock market has been one of the best performing investments over the last 10 years; so why is it important to continue holding bonds in your portfolio? Tune in to find out!

Market Insights & Commentary

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Investors couldn’t have asked for a better start to the 2019 calendar year. It was only a mere five months ago that the stock market was experiencing a nearly 20% correction from all-time highs and everything seemed doom and gloom. Fast forward to the present, and there seems to be an entirely different sentiment in the capital markets.

2018 was an unusual year in that the bond market was flat and stock markets across the globe were negative. Typically, bonds and stocks move in opposite directions of each other, which is why investors own both in a diversified portfolio. Stocks took a nosedive at the end of last year due to fear that the global economy was heading into a recession. Jerome Powell, Chairman of the Federal Reserve, came out at the end of last year and indicated that the Fed was going to be more patient in raising interest rates. Ever since these comments, risk assets such as stocks and high-yield bonds have taken off.

Economic data has continued to be positive as well, with no signs of a recession in the near future. Although GDP growth in the United States is slowing, it still remains positive. This was the goal of the Federal Reserve in raising interest rates, to prevent the economy from overheating but also to avoid a rapid slowdown that could force a recession.

There are worries that the stock market could have priced in all of its gains already for 2019. While it is unlikely that the stock market will continue its rapid trajectory through the end of the year, there really is no way to tell where the market will go from here. Trade talks between the US and China will continue to dominate headlines and have an effect on the markets. We still are in the later stages of the business cycle, so there will most likely be a bumpier ride for the stock market during the rest of the year.

If an investor is uncomfortable with fluctuations in their portfolio, it may be time to add more conservative investments, such as bonds, to act as a stabilizer. Barring any interest rate hikes, bonds should seek out a positive return for this calendar year. So far 2019 has been a very good year to be an investor in the stock market, but if 2018 has taught us anything, it’s that the stock market can deteriorate in a hurry. This uncertainty is why investors get compensated for the risk that they take, if they can stomach it.