April 25, 2014 § Leave a comment
Finance professional Curtis Lyman has more than three decades of experience in financial services. As owner and partner at HighTower Advisors, Curtis Lyman is called upon to advise institutions, corporations, and high-net-worth investors across the country regarding customized investment strategies.
Investors with a lower tolerance for risk may prefer to adopt conservative investment strategies. These strategies strive to preserve the value of an investment portfolio as much as possible by opting for securities with a lower risk level, for example a fixed-income security or blue-chip equity. Other examples of low-risk investments include cash vehicles, government bonds, or dividend-paying stocks.
Two commonly employed conservative investment strategies are current income and capital preservation. Current income portfolios take advantage of the high annuity, bond interest, or dividend payments dispensed by mutual funds or securities, promoting a steady income. As the name suggests, the goal of capital preservation is to preserve value over time. The rate of return on such investments is designed to meet or exceed the rate of inflation.
March 20, 2014 § Leave a comment
Besides operating as partner and managing director of the Lyman Group at HighTower Advisors, Curtis Lyman supports a number of charitable endeavors. As a former member of the board of advisors for Harriet L. Wilkes Honors College at Florida Atlantic University (FAU), Curtis Lyman assisted the school in keeping its tradition of providing a quality education. Well known for its Christine E. Lynn College of Nursing, Florida Atlantic University will soon offer its RN-to-BSN program and its family nurse practitioner master’s degree program at the FAU Oceanographic Institute in Fort Pierce.
With the enactment of the Affordable Care Act (ACA), nurses are playing and will continue to play an expanding role in providing health care to Americans. In response, FAU offers its family nurse practitioner master’s degree program, which involves a complete education available through online classes and on-site clinical training that leads to the development of extensive professional knowledge and capabilities. Upon graduating from the program, FAU nursing students will have the skills necessary to furnish a high level of care to the close to 300,000 Floridians now possessing coverage under the ACA. Master’s degree program graduates taking the nurse practitioner exam have a 100 percent proven passing rate over the past five years. For more information about the program, please visit Nursing.FAU.edu.
March 3, 2014 § Leave a comment
Many Palm Beach area residents are not as wealthy as they were before the 2008 recession, even though the financial markets have staged a strong comeback. Let’s look at what happened, and discuss where you can go from here if this is your situation.
Many high net worth residents of country club communities in the wealthy zip codes of Jupiter and the Palm Beaches suffered substantial losses during the economic crash. These losses may have come at their own hands or because they were ill advised by their brokers. In times of stress, some financial advisors will recommend pulling back, but that’s not always the best reaction to a market downturn.
Emotional investors tend to “buy high and sell low”. Academic studies would indicate that individual retail investors often underperform the markets because of this tendency. Some studies indicate that individual retail investors typically average 4% from long term investments over time, against much higher long term averages for asset class indexes.
Experienced financial advisors, like those at The Lyman Group, tend to operate counter-intuitively. That is to say, when others are fearful and selling their positions for lower prices, the Lyman Group team is combing through the data, looking for bargains with upside promise.
It’s understandable for most advisors to recommend a conservative approach, because investors are scared and they want to stop the volatility and feel that their money is secure. But this reactive approach, as opposed to a proactive approach, is often too risk-averse. The investor ends up with anemic returns that force him or her to spend more of their principal on living expenses.
Successful investment advisors know that a market downturn is a signal to buy. That’s because the prices of securities and other investment instruments are at a low point. Throughout history a downturn has been followed by a recovery, and it happened over the last five years as well. Those who fled the market in 2008 missed the ensuing run-up.
After a downturn, the likelihood is the economy will heat back up, interest rates will rise, and the value of conservative bonds will fall in relation to more growth oriented investments. In the longer view, most asset classes have enjoyed historic rates of return of 11% annually, so you can see that historically the upturns have more than matched the downturns over time.
For advisors, though, it can be very difficult to tell a worried client it’s time to buy when the markets have plunged 20% and the financial headlines are grim. That takes an advisor who’s trying to make money for you, as opposed to telling you what he thinks you want to hear.
The Lyman Group at HighTower Advisors, a Registered Investment Advisor, has a fiduciary obligation to put your interests first, and will design a financial plan that takes market downturns into account and turns them into buying opportunities. And unlike brokers, The Lyman Group at Hightower Advisors does no commission based business.
In the meantime, Palm Beach County country club communities such as Admirals Cove, Old Palm, Trump National, BallenIsles, Mirasol, Bear’s Club and Frenchman’s Creek can suffer economically because their residents have less money to spend. Country clubs have a lot of fixed costs related to maintenance and if they reduce staff, members get less service. These clubs tread a razor’s edge in keeping “costs per member” under control while providing the service that members expect.
Some clubs have reduced membership fees, but that option can upset members who paid a higher fee previously. Others have merged with larger organizations, and a couple of clubs have filed for reorganization.
If you are a resident of a country club community in Jupiter, Palm Beach, North Palm Beach or Palm Beach Gardens, it’s important to take a more proactive and comprehensive approach to your finances. Make sure you understand your country club community’s financial situation, and make your voice heard as a member.
March 3, 2014 § Leave a comment
The private country clubs that dot North Broward County and South Palm Beach County tend to be older and smaller than the better-known clubs in North Palm Beach County.
While the price of annual dues is about the same, it can cost significantly less up front to join a club further south, in the Boca Raton, Deerfield Beach, Pompano Beach and Coral Springs areas. For instance, Boca Grove Plantation in Boca Raton has just 18 holes for a golf membership equity fee of $85,000 and annual dues of $17,258. Compare that with Frenchman’s Creek to the north, in Palm Beach Gardens, which has 36 holes and charges $150,000 for an equity membership and $22,559 a year.
There are clubs in North Palm Beach County that charge much less and much more than Frenchman’s Creek, but the clubs in Broward and South Palm Beach counties tend to have similar cost structures. For instance, Mizner Country Club in Delray Beach, with 18 holes, charges a golf membership equity fee of $95,000 and annual dues of $17,300.
Boca Raton also offers Addison Reserve, Broken Sound Club, St. Andrews Country Club, Stonebridge Country Club and Woodfield Country Club, while Delray Beach also has the Delaire Country Club and Bocaire Country Clubs.
Whether you are relocating permanently or shopping for a second home, buying into a luxury country club community is an expensive choice. While the ultra-wealthy may not be too concerned with club expenses, many successful people who move to the Palm Beaches and Broward County region need to ensure that their decisions do not derail their retirement plans.
A few country clubs in Broward and North Palm Beach counties went bankrupt or were sold due to the 2008 economic downturn, but most emerged intact and are currently advertising for new members. Here are a few items to consider when you compare the country clubs in this area of Southeast Florida:
Find out how much is built into the annual dues related to future renovation projects. This is important because these facilities tend to be older, having been built in the late 1960s and early 1970s, and because the area was hit by damaging hurricanes in 2005-2006. Many clubs have renovated to repair damage or to update their new facilities and some of those “legacy costs” may be baked into the cost of membership. If they haven’t renovated recently, they may be planning to. Asking a lot of questions about the plans and financial structure of the club you are considering joining can avoid an unpleasant surprise later on.
Check the pro shop, bar and restaurant.
You can tell a lot about the health of a country club by visiting the pro shop and the food services facilities. If they are busy, clean, attractive and up to date, that’s usually a good sign because it means the club has the funds to offer top facilities and services. Look for a sharp appearance and friendly service. If the pro shop and the restaurant appear rundown and lacking in help, that’s a sign the club may soon have to impose a large assessment on members to pay for upgrades.
Look for refundable equity memberships.
At most clubs, your equity membership fee is refundable when you sell your home. A few clubs offer non-refundable equity memberships, though, and this is a sign they don’t have a healthy number of people trying to get into the community. Such a membership is actually a capital contribution, not an equity membership.
Check out the membership waiting list.
Ask for the club’s waiting list. A long list means there are people wanting to buy in, so you are more likely to find a buyer quickly if you decide to move out and have your equity membership fee refunded. At some area clubs the situation is reversed. They have a waiting list of members wanting to move out and get their equity back, clearly a bad sign regarding the future financial health of the club. This latter scenario is all too common in older club oriented communities where the “new” home buyers of 30 years ago were 30 years younger and are now aged, not playing golf or tennis, but not yet selling their homes, resulting in a stagnant club membership.
Understand all of the costs.
Many country clubs require residents to purchase equity in the club through a one-time equity fee for a full golf membership that ranges from $45,000 at Woodfield Country Club to $100,000 at Addison Reserve, both in Boca Raton. You also must take into account annual dues, trail fees, and the costs of dining and other social activities.
Other items to consider are the number of golf holes since multiple courses offer you more variety, the number and variety of other events and attractions such as game nights, lectures, tennis tournaments and summer camps, especially if you have a big family and whether the club requires you to maintain your golf membership and dues even if you become physically unable to play.
“Demand for homes in these luxury country clubs decreased in 2008 and is growing again now. These clubs aren’t struggling like they were,” says Michael Robinson, a financial advisor at The Lyman Group - HighTower Advisors and a former area golf professional. “That will place upward pressure on home prices and, eventually, club revenues.”
However, an aging population has slowed the growth of golf-oriented country clubs and will likely lead to consolidations and even potential failures among these communities in South Palm Beach and Broward counties.
“As residents age and they can no longer play golf, that has a great impact on the stability of the club,” Robinson says. “If your rounds are down the courses are not generating as much money.”
Buying a home, or a second home, in a beautiful Southeast Florida retirement community can be a spectacular reward for your hard-earned success. As with any high-end purchase, look at it from a retirement planning and wealth management perspective before making your final choice.
How a Registered Investment Advisor Differs From a Stockbroker and Why Palm Beach Residents Need To Know
March 3, 2014 § Leave a comment
It’s tough to find anyone using the title “stockbroker” anymore in Palm Beach, West Palm Beach, North Palm Beach, Palm Beach Gardens, Jupiter or anywhere else. Traditional brokers advertise as financial advisors or any number of other titles that seem to promise more than simply trading.
Yet most individuals who work for traditional “name brand” brokerage firms are stockbrokers, meaning they sell investment products for their company and receive payment in the form of commissions, usually a percentage of the sale. It’s not hard to see that these individuals have a conflict: Providing you with investments that best match your needs may not yield the highest commissions. Even the most well meaning Palm Beach area broker can convince himself or herself that the company’s products are best for you, after all.
Some brokers give the appearance they are managing money for fees by hiring third-party money managers, but there is still a conflict: The broker may resist moving money out of the market and into cash in times of financial market stress because the broker doesn’t get paid as much if the client’s money is placed in money market funds rather than with the money manager.
Successful individuals who have a high net worth sometimes retain brokers year after year simply because they started out with the brokerage firm. How many residents of area country clubs such as PGA National, BallenIsles, Ibis, Mirasol, Bear’s Club, Old Palm, Old Marsh and Frenchman’s Creek continue this outdated way of investing?
There is a better way: Work with a fiduciary such as Curtis Lyman, of The Lyman Group at HighTower Advisors, a Registered Investment Advisor (RIA). RIAs are advisory firms that register with the U.S. Securities and Exchange Commission and state authorities and take on a fiduciary duty, meaning they are obligated to act in the client’s best interest at all times.
The Lyman Group does not take a commission on any products or services. As an RIA, The Lyman Group operates on a fee only basis, meaning we earn a straight fee as a percentage of assets under management. As such, we have an absolute objective to increase your account’s market value. It places us on the “same side of the table” as you.
As someone who has reached a high level of success, you owe it to yourself to work with a comprehensive wealth management firm. The Lyman Group provides holistic financial services driven by your needs and goals. Unlike brokers, who are concerned primarily with your investments and the commissions they may drive, we manage your entire financial picture, from taxes to estate planning. That brings advantages of coordination and efficiency that ultimately help improve your retirement bottom line.
At The Lyman Group, we focus on helping you achieve what we call your Life Vision. To be sure, a key component is the generation of predictable and consistent investment returns over time. The difference, though, is that a Registered Investment Advisor firm such as HighTower, The Lyman Group will handle your investments within the larger context of your goals. It’s a difference that can have a huge impact on your financial future.
February 4, 2014 § Leave a comment
As I write this, the S&P 500 is trading just above what we believe is the area of and for some significant support at 1750. It is likely that this support level will be tested as investor sentiment has gone from being very constructive and bullish to now negative and bearish.
Unlike the adrenalin laden “talking heads” one can watch on the television business shows this morning, or the caffeine (and other substances) jacked up hedge fund traders, we tend to take a slightly longer view than an 8 hour “clip”. You might remember the adage “trade on sentiment, invest on fundamentals”. We are investing on fundamentals and, hopefully, taking advantage of sentiment which provides opportunity for those of us who are unafraid and confident in our investing discipline.
We do view the current market volatility as “normal” and expected and believe that it presents the opportunity to put new funds to work as well as providing the opportunity to rebalance portfolios, sloughing off the “old” and “tired” stories, for newer names with more efficient upside potential.
Our view of the macro-economic world remains favorable to investment in stocks. As we know, however, equity investing requires patience and a cool, calm head, not a temperament that is rattled by some opinion on the television or by momentary movements in account values.
Why aren’t we afraid here? Simply put, corporate profits drive earnings which drive stock prices and corporate profits are increasing. According to FactSet, the blended growth rate for Q4 S&P 500 EPS currently stands at 7.9%, up from 6.4% at the end of last week. This is above the prior four quarter trailing average of 3.8%. A review of the data reveals that only financials and energy revenues are significantly lagging estimates of revenue growth. This would support our thesis that commodity prices will continue to remain soft due to a slowing China and that until interest rates move higher, traditional financials will continue to have to fight for higher earnings through share buybacks and other balance sheet strategies.
We are in the “thick” of earnings season and with just over 50% of the S&P500 companies having reported earnings, 75% of them have beaten consensus earnings estimates. So it appears to us that U.S. large cap companies are performing better in the earnings departments than expected.
The macro-economic backdrop has some weather related chatter (oh, sorry… that is a very cold pun…) (December and January economic data) associated with it at the moment which will negatively impact some of the economic data in coming weeks, but my view is that those analysts who have chosen to express a chilly view may be left out in the cold unless they warm up to the following: (again, sorry, it must be my Buffalo roots…) For example, jobs growth and housing data are likely to have slowed a bit. Increased usage in natural gas and higher heating fuel prices will take money out of the consumer’s pocket, leading to concerns of a renewed U.S. economic slowdown. Even if this develops, it is weather related and a momentary blip, in the larger scheme of things.
I believe that there are a number of U.S. based “tailwinds” that militate continued equity ownership. Declining commodity prices are at the top of my list, which lead to low/slow inflation. Higher domestic corporate profits are improving consumer confidence as well as pushing jobs growth. Banks are more willing to make loans, including mortgage loans, though U.S. mortgage rates had pushed higher but seem to be moderating in the past few days as the 10 year U.S. Treasury rate has fallen back to 2.6% from slightly above 3% just a few weeks ago. The U.S. based energy renaissance, the pickup in U.S. based manufacturing, and higher 401k balances all work in tandem to improve the U.S. based economic outlook.
Headwinds might exist, not the least of which is emerging market stagflation. It is a reason why we’ve underweighted emerging market bonds and stocks. While we believe that there are “green shoots” in Europe, that recovery is fragile and one of the European “big three, France, has some significant economic, political and social issues that could slow the Euro-recovery.
Looking forward at the economic fundamentals, we believe that while the frigid U.S. weather will negatively impact December and January data, the economic recovery and firmer stock prices remain in place. Specifically, I think that the U.S. housing recovery will continue, though at a moderate pace. Employment gains will continue to be made and are being driven by corporate profits which, according to Cornerstone Macro, have increased 114% from their recession lows. U.S. GDP growth is improving, consumer spending is rising, and capital expenditures are increasing. Inflation is low. Perhaps most important is that China continues to slow as its central government and banks try to cool off its overheated economy. As a result, the Chinese leading economic indicators are down while those in the U.S. are higher, China is tightening its monetary policy while the U.S. continues to be accommodative, all of which impact commodity prices and the U.S. consumer’s wallet.
In the shorter term, we view the technical measures for U.S. stocks as fairly positive, with the exception of sentiment. With the recent volatility, however, I think that bullish sentiment has dissipated and has been replaced by a strong negative overtone which tends to be often constructive for stocks. The trend is a bit higher by our measure, momentum at the moment is soft, breadth and leadership are both positive in the U.S. equity markets. In our view, the things making us at all cautious are seasonality and concerns over the emerging markets.
So we view the current stock market declines as expected and healthy and as setting the stage for a broader longer term advance.
Lastly, I want you to know that our position is supported by the “Super Bowl Indicator”. As you and I know, this is a wholly illogical indicator that has a surprisingly high history of being “correct” in the last 37 of 47 years according to Dow Jones. The theory is that the stock market will gain for the year if an NFC team (Seattle is an NFC team) or an AFC Team that was original NFC team wins the game. If an AFC team wins, the market will end the year lower. The indicator has been correct 78% of the time. Because Seattle is an NFC team and won the game, one might predict a higher market at the end of the year. While I am not a devotee of the Indicator and believe that it’s a case of purely random results, it might be a source of solace if you’re feeling queasy as the market acts irrationally here. Next time, we’ll talk about the “Hemline” Theory.
While we don’t like down market volatility, we don’t believe that the current stock market declines are overly worrisome at this point. Should you have any questions, or like to discuss whether we should simply run defense with the Super Bowl Theory, please feel free to give me a call or email me.
The Lyman Group is a team of investment professionals registered with HighTower Securities, LLC, member FINRA, MSRB and SIPC & HighTower Advisors, LLC a registered investment advisor with the SEC. All securities are offered through HighTower Securities, LLC and advisory services are offered through HighTower Advisors, LLC.
This is not an offer to buy or sell securities. No investment process is free of risk and there is no guarantee that the investment process described herein will be profitable. Investors may lose all of their investments. Past performance is not indicative of current or future performance and is not a guarantee. Before investing, consider the investment objectives, risk, charges, and expenses. Diversification does not assure a profit nor protect against loss.
In preparing these materials, we have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public and internal sources. HighTower shall not in any way be liable for claims and make no expressed or implied representations or warranties as to their accuracy or completeness or for statements or errors contained in or omissions from them.
January 25, 2014 § Leave a comment
A partner and owner of HighTower Advisors in Palm Beach Gardens, Florida, Curtis Lyman has more than 30 years of financial experience. In addition, Curtis Lyman supports a number of charitable causes, including the American Red Cross.
Recently, the Red Cross released its Pet First Aid app for Android and iPhone. Pet First Aid contains information about cats and dogs regarding allergic reactions, bleeding, breathing problems, CPR, and a number of other answers to commonly asked pet health questions. In order to develop the app, the Red Cross worked closely with a team of experts at Penn Veterinary Hospital.
Users have the ability to create a profile for their pet that includes an ID number and a list of medications. In addition, the app provides numbers to the nearest veterinarians and hotels that are pet-friendly. A must have for pets with health problems and owners in need of a pet sitter, Pet First Aid is 99 cents to download, and proceeds benefit Red Cross efforts.