KFM Newsletter - Looking Forward to 2018

Financial Markets

Most of our conversations with clients have revolved around “When is the next correction going to occur? These returns seem too fast and too good to be true.” While we do not have the proverbial crystal ball, we should appreciate the returns that we have received, as the gains in the market appear to be generated for the right reasons.


If you look back over the last four years, it has only been the last 15 months that have generated the positive results. Prior to this recent period of gains, 2013 was our last good year.  In 2014, we had very low returns and results. In 2015, we gave most of the gains back. By October of 2016, the capital markets were only positive 3% as measured by the Standard and Poor’s 500 Index. For three years, the market essentially moved sideways. While 2016 ended up being a very good year following the election, 2017 was even better.

Candidly, we see the lack of enthusiasm towards the financial markets as a good sign. We would be more concerned if the markets resembled that late 1990s when the mentality was “just get me invested into the market, because there is no where it can go but up.” In the first chapter of the book, Ten Truths: How to Create Financial Independence, I discuss the mentality investors had towards the financial markets. Everyone seemed to believe the capital markets would do nothing but go up. There was no indication the financial markets would correct themselves and the general consensus was all one needed to do was be invested in technology stocks.

That all ended with the implosion of technology companies, that candidly, just ran out of capital before their businesses made money. There was euphoria in the air and investors seemed reckless. We do not see investor behavior or the markets behaving like the late 1990s. Today, investor sentiment is much different. We believe the pessimistic sentiment is actually good. But more importantly, the capital markets are rising for the right reasons.

Here’s why the markets performed well in the past 15 months. We continue to remain in a low inflation, low interest rate environment. Corporate earnings continue to grow in the process. Balance sheets remain strong. Manufacturing levels continue to point towards growth. Gross Domestic Product is increasing. Unemployment levels remain low. Jobs continue to be created. Consumer confidence and spending is healthy. The drivers that move markets higher are clearly in play. We believe this is why we have seen the positive moves in the global markets over the past 15 months.

There are dark clouds that remain in place. The geopolitical issues continue to be in the forefront of the news. In January of 2016 it was Syria. Today it continues to be tensions with North Korea and Russia. While we see these as threats to the emotions of the market, we are hopeful, like everyone, the tensions are relieved and the global economy can continue to expand.

Also in the book Ten Truths, we discuss performance equals market returns plus investor behavior. We know the great recession of 2008 and 2009 shook the confidence of everyone. The memory is still fresh on everyone’s minds. While we do not know where the markets are headed, we do believe we take market returns when we can get them. The rising tide in the financial markets has helped all of our clients with gaining momentum towards their unique, independent desires. To that end, we are grateful for the last 15 months of improving conditions in the financial markets.


Tax Planning for 2018

At Kemp Financial we focus on holistic personalized planning for our clients. Retirement planning is the common denominator for our clients. But most recently, with the passing of the new tax bill, tax planning is currently at the forefront of most everyone’s minds. While the biggest change in the new tax laws are most favorable for small and large businesses, we are still gaining more information as to the benefits for individuals.

During the first quarter of 2018, we will be discussing the new tax laws during your update meetings to see if there are any new laws that will favorably impact you. While we have already found some opportunities, we have been warned by many of the CPAs that there will be technical corrections that follow the passing of this new bill. From their prior experience with tax law change, it will take several months before we know exactly what the impacts from the most recent bill will have on you and your personal situation.


Our Book

We have received positive feedback from those of you that have taken the time to read Ten Truths: How to Create Financial Independence. We have enjoyed discussing the content over the phone and during our regular update meetings. Thank you for the comments and we hope you keep them coming.

Several of our clients have bought the book through Amazon. While we appreciate the book sales, we do want you to know if you would like a copy of the book for a family member, colleague or friend, simply contact Wyatt for an additional copy. We have a number of copies available and hope that it will provide insights and transformation for people that are in your inner circle.  If you have not done so already, please view the brief video introduction of the book on our website at www.kempfm.com/10-truths-book.


We have upgraded our technology to bring our “family room to your family room”. While we prefer having all meetings at our offices, we recognize that not everyone has the ability to get to our office, whether it is scheduling conflicts or just simply due to location. Over the past 20 years, many of our clients are no longer located in Southern California, having moved to more tax friendly states or simply to be closer to family.


With the help of GoToMeeting, we can bring our “family room” experience to you through any portable device. Whether it be your mobile phone, tablet or computer, we can have a video conference that will allow us the opportunity to see one another as well as work through the update meeting data together. Again, this is not meant to replace the face-to-face meetings that we prefer, but an opportunity to have a similar feel in an environment that can accomplish the same goal.

If you have not done so already with previous meetings, you can always schedule your update meetings through our website at kempfm.appointlet.com or by clicking the “Schedule Meeting” on our website header or Contact page. We have also added a “GoToMeeting” option through the appointment setting process. Please visit our website to schedule your next meeting.

New Statements

You will notice new statements this year which are a little more comprehensive than the statements you have received in the past. We have been using the new statements in our update meetings for the past several months, so you may have some familiarity with the new look and feel.

The online access to information has also been upgraded. For those of you using the Schwab website to access information for your account, we would highly recommend that you give the new site a try. To login, go to the “Account Login” page of our website (www.kempfm.com/account-access) and click the button to log in to your account under the Loring Ward logo. If you have not logged in to the new site, you will have a new username and temporary password.

Your Username is the first initial of your first name + your last name + DOB (all 8 digits) with no spaces. The username is NOT case sensitive.

Username Example:  For Jane Smith born on June 15, 1946 = jsmith06151946

Your Temporary Password is your Advisor’s last name (first letter capitalized) + 2017. This password is case sensitive.

Temporary Password for Advisor Rob Kemp = Kemp2017

Once you have logged on, you will be prompted to update your password. Please contact Wyatt should you need any assistance in gaining on line access to your accounts through our website.


We look forward to 2018 and all that it has to offer. We look forward to seeing you in the upcoming weeks and months, whether it be in person, by phone or through “GoToMeeting”.

Until then, we wish you the very best of health, happiness and success in the New Year and beyond!