May 2019 Newsletter to Clients

Enjoy this month’s newsletter which features commentary on our fixed income asset class, clarification on TD Ameritrade’s Standing Letter of Authorization (SLOA) notice to clients, some exciting technology features we are rolling out to clients over the next several months, shred day for disposing of sensitive documents and our annual Privacy Notice.

Fixed Income: The basketball great, Larry Bird, is reported to have said, “I hate to lose more than I like to win.” Many investors have the same sentiment.

Each of your investment portfolios – all your investment accounts considered together – is constructed to accomplish your own personal goals. Almost every single portfolio, however, contains the common element of Long-Term Income investments. The older you are and the safer your investments need to be, the higher percentage of your assets are in Long-Term investments. But, even our younger clients own some of these investments too because they are generally more stable in price than stock mutual funds and hopefully zig when the stock market zags, helping to smooth out the ride.

We have talked about the purpose of holding BlackRock Floating Rate Income (BGT) as part of your Long-Term Income investments. BGT invests in bank loans and provides a current yield – cash distributions as a percentage of the purchase price – of around 6%. As you might expect, bank loan funds perform better over time when interest rates are rising as banks can charge more for those loans.

Some portfolios also include more traditional bond funds such as the Loomis Sayles Bond Fund (LSBDX) or Lord Abbett Short Duration Bond Fund (LALDX). These funds invest in corporate and Government bonds. What they have in common is their relative short duration – a measure of how the price of a bond will move when interest rates rise or fall. We believe, over the long-haul, that interest rates will rise as they are still low compared to their historical trend. In fact, the difference in yield between a 10-year U.S. Treasury and a 2-Year Treasury is only .18% as of this writing. Why take 8 years more risk for an extra yield that small? We don’t believe that makes much sense. We also believe investing in shorter duration bond funds will help us avoid what Larry Bird hated so much.

TDA Standing Letter of Authorization (SLOA): On March 15, Moneywatch clients started receiving SLOA confirmation notices in the mail from TD Ameritrade. These are annual notices that include standing move money instructions (i.e. direct deposit to/from TDA, direct deposit to/from client checking account or internal transfers). Some reasons for granting move money instructions include making contributions or distributions to retirement, educational or taxable accounts. They also allow for direct deposit for clients taking distributions. Please review these notices and let us know if changes are necessary.

Advyzon: Imagine ONE PORTAL for all your FINANCIAL DOCUMENTS.  We will be rolling out new client portals in the next coming months, we think you are going to be very happy with the improvements.

Shred Day:  Stay tuned for a shred day later this summer.

https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records

Privacy Notice: Moneywatch Advisors, Inc. collects non-public personal information about you, our client, from the following sources:

• Information we receive from you on applications and other forms.
• Information about your transactions from the firms that have custody of your assets. (Financial Service Providers, TD Ameritrade)
• Information we receive from outside affiliates with whom you have a relationship, i.e. retirement plans. This only applies if the client has given the affiliate permission to provide us with that information.

Moneywatch Advisors, Inc. collects the following types of personal information:

• Social security number
• Date of birth
• Driver’s license number, state of issuance and date of expiration, passport number
• Telephone number
• Physical address
• Email address
• Banking information

Moneywatch Advisors, Inc. does not disclose any non-public personal information about our existing or former clients to anyone, except as permitted by law and at the request of the client.

Moneywatch Advisors, Inc. may disclose non-public personal information about you to the following type of third party:

• Financial service providers whom you have authorized, particularly TD Ameritrade.

Moneywatch Advisors, Inc. restricts access to non-public personal information about you. Moneywatch employees are able to access your personal information when providing our business services to you. We maintain physical, electronic, and procedural safeguards to protect your non-public personal information. This includes restricted access to our office, restricted access to our files, password-only access to our computers, and password-only access to our software. All access to personal information by employees is for business purposes only. All employees are required to safeguard such information. Client information is never released to third parties for marketing purposes.

Moneywatch Advisors, Inc. has established an Information Security Program & Identity Theft Prevention Program designed to detect, prevent, and mitigate information and identity theft. (updated annually in April)

Our company code of ethics is available upon request. (updated annually in July)

Please contact Ramsey Bova, Chief Compliance Officer, if you have questions or concerns regarding this notice or our company Privacy Policy. We encourage all clients to safeguard their personal information and never provide third parties with personal information without first verifying the validity of such requests.

Thank you for your continuing confidence.

Past performance is no guarantee of future results. The opinions expressed are those of Moneywatch Advisors, Inc. and are no guarantee of the future performance of any particular fund. This information is for educational purposes only and is not intended as investment advice. Please consult your financial advisor for more detailed information or for advice regarding your individual situation.