 JOHN
GUGLE AND JIM McGEHEE
Alpha Financial Advisors
By Bob Barber
Cecily Durrett introduced the speakers, John
Gugle and Jim McGehee of Alpha Financial Advisors. John is a
Certified Financial Planner and Jim is also a Certified Financial
Planner and holds several other certifications in financial and
investment management. Alpha Financial Advisers is a private,
fee-only financial planning and investment management firm in
Charlotte. Working as a "tag-team," Jim started with some thoughts
on the current environment for investors. The access to information
on the internet and the 24 hour a day business TV programs has
somewhat leveled the field for private investors relative to the
professional investor. The success of high-profile investors such as
Warren Buffet and George Soros has not been in their ability to pick
stocks, but in their ability to see the big picture and to see
trends that will affect investments in the future. To be a
successful investor in the long-term, you must be cognizant of the
impact of government actions.
John then jumped in and said that over recent history, the 125 days
leading up to a mid-term election have produced mixed results-six
times the market was up and six times it was down; however, in the
125 days after the last twelve mid-term election where in every case
the market was up. This is because the markets hate uncertainty and
after an election, the uncertainty is reduced. For 2006-2008,
personal finances will be affected by a number of political facts
and trends:
- President
Bush is going into his last two years in office with no
heir-apparent. He has lost political capital in Congress
in addition to being a "lame duck."
- The
Democrats may gain seats in the 2006 elections.
" Only one time since Republican Rutherford B. Hayes
succeeded Republican Ulysses S. Grant in 1877, has the
party of a sitting two-term President retained the
presidency in the next election-that was when George H.
W. Bush succeeded Ronald Reagan in 1989. Thus, it may be
likely that the Democrats will win the presidency in
2008.
- Taxes are
too high but Congress will not control spending so taxes
are likely to go up.
- State and
local taxes will continue to go up as programs are
shifted from the federal budget to state and local
governments. Infrastructure needs will have to be
funded.
- The
economy is going to face pressures in 2006, including
higher inflation, interest rate increases by the Fed,
declining home sales, increased cost of materials, and
increased cost of oil.
- The next
recession is likely to be demand driven as consumer
spending declines due to reduced discretionary income.
- We are
facing a loss of control of our own economy-for the
first time, more corporate dividends are being paid to
foreign investors than to domestic shareholders.
- Debt
service is consuming a major part of disposable income.
- Savings is
down.
-
Foreclosures are up 68%.
- As
increasing numbers of Americans are retiring, it is of
concern that income of $25,700 or more puts one in the
top 25% of income for those over 65 and that the
retirement saving of the average American only totals
$25,000.
- As a
debtor nation, we have little control over much
investment capital-if foreign nations started dumping
our debt, our interest rates could skyrocket.
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Jim then jumped back in for
some prescriptions: keep investments well diversified, watch for
investments that will still do well, maintain good cash reserves,
and get good tax advice.
In questions and answers, Jim and John said that the housing sector
would go down, inflation protection securities should be considered,
and commodities (particularly construction materials) will likely go
up. International diversification of portfolios should be increased.
An increase in the tax on gasoline would increase gas taxes,
reducing demand for gasoline and reducing the price of oil.
Investments in alternative fuels might be considered. The liability
for unfunded government pensions is enormous and the federal
government should follow the lead of industry and move to defined
contribution rather than defined benefit plans. Much of the federal
budget is devoted to debt service and spending must be curtailed,
programs must be cut or eliminated, and debt and interest must be
reduced.
It was interesting to note later in the day that a number of
investors, having not been privy to today's program, went on a stock
buying spree that raised the Dow by 195 points for a 1.8% gain, the
NASDAQ by 2.0%, and S&P 500 by 1.7%--all on news that the Fed may be
near the end of its rate-tightening campaign.
Head Table:
Chip Scholz; Pam Daigle; Herb Harriss; Cecily Durrett; John Johnson;
Visitors &
Guests:
Invocation: Bill Loftin; Visitors & Guests: Mark Norman
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Rotary Club of Charlotte
841 Baxter Street, Suite 118, Charlotte 28202
chltrot@bellsouth.net 704-375-6816 |
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President Herb covered
Health & Happiness this week, saying it was good to see
Jim Haney feeling better
and back at "The Table"; Mike Rash
is recuping from knee surgery and was at lunch today;
birthday wishes were sent to
Charlie Pitts and Bruce
(Happy 50th) Darden.
þ
David Norman
will be set up to take Roster photos next week, April 25th
and again on May 9th. The cost is $10 and the location is
the Empire A room, between 11:30 and 12:30.
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Another amazing Powell Majors
discovery: his mother was living in San Francisco and
pregnant with Powell when the big earthquake hit on April
18, 1906.
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Sympathy is extended to our Family of Rotary.
Jan Thompson lost her
brother, Bill Sumner,
last week. Bill was living in Cranford, NJ.
Jim and
Sadler Barnhardt's mother,
Eleanor, lost her
husband, Dr. John M. Douglas,
on Good Friday.
þ
Several Rotarians appeared in the papers over the last week:
Claude Lilly, Dean, Belk
College of Business, reports a program in entrepreneurship
is alive and thriving with forty-five undergraduate students
at UNCC; Sherman Burns
hopes to break into show biz by playing a corpse, with the
help of cousin, Robert David Hall, who plays Dr. Al Robbins
on "CSI"; Ronnie Bryant
discussed plans to ramp up economic development efforts of
the Charlotte Regional Partnership; Charlotte Business
Journal's 20th Anniversary special publication provided an
inside look at people, places, and events that have helped
shape Charlotte's business community over two decades.
Mentioned were Tony Zeiss
for the vision and growth of CPCC;
Tim Newman for spearheading the NASCAR Hall of
Fame project; Katie Tyler
as a leader in the emerging role of women in business.
þ
Dilworth South End Rotary Club
will hold a fund raiser to benefit their local and
international service projects by participating in the South
End Art and Soul Festival on April 29th and 30th. Look for
their big tent that will be set up in front of Price's
Chicken Coup. A donation of $8 will buy your choice of a BBQ
plate, 2 sandwiches, or 1 pound of BBQ.
þ
Marcus Lee, an attorney
with Helms Mulliss & Wicker, was introduced to the club by
his sponsor Chris Kemper
on Tuesday. Contact Marcus at
marcus.lee@hmw.com. |
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THE FOUR WAY
TEST |
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Of the things we think,
say or do
Is it the TRUTH?
Is it FAIR to all
concerned?
Will it build GOODWILL
and BETTER FRIENDSHIPS?
Will it be BENEFICIAL to
all concerned? |
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Attendance
Record |
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4/18/06 |
4/19/05 |
| visitors &
guests |
10 |
13 |
| club
members |
172 |
171 |
| total
attendance |
182 |
184 |
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New Members | Resignations |
Todd Smith
Marcus Lee |
Dee Milligan
Bill Blackwell |
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| Roaming
Rotarians |
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Frank Watson - Texas, Las Vegas, and Orlando |
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Wedding
Anniversaries |
25 Dot and Martin Waters
26 Teresa and Matt McQuide
27 Karen and Rob Calder |
| Birthdays and
Birthplaces |
26 Natalie English, Cabarrus Cty
26 Ronnie Pruett, Mt. Airy, NC
26 Biff Virkler, Philadelphia, PA
27 Rex Welton, Charlotte, NC
28 Jim Alexander, Charlotte, NC
29 Chuck Cocke,
St. Johns Newfoundland |
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