FUND A LIFE YOU LOVE
August 2017 Outlook on Procter and Gamble (P&G)

August 2017 Outlook on Procter and Gamble (P&G)

August 2017 Outlook on Procter and Gamble (P&G)

Current P&G Stock Outlook:

  • We are maintaining our 12-month outlook of $96/share.

  • In our $96/share target, we have included a $6/share reserve for upside reflecting the positive impact of Trian Partners $3.5 billion investment in P&G and pending proxy fight to secure a board seat for Nelson Peltz. We would have increased our 12-month outlook to $102/share and included a $12/share reserve if Trian was not facing a proxy fight with P&G.

  • For perspective, Wall Street analysts have an average 12-month stock price target of $92.37/share.  Analyst forecasts currently range between $80/share and $104/share. Please note there has been a $0.87 or 0.9% increase in the Wall Street Analyst average since our May 2017 outlook.

Highlights of P&G’s Quarterly Results:

  • P&G continues to deliver on the forecast, but the overall results are very incremental.
  • P&G had total organic sales growth of 2% for Q4 FY 2017.
  • P&G reported fourth quarter fiscal year 2017 net sales of $16.1 billion, unchanged versus the prior year (this includes a negative 2% impact from foreign exchange).
  • Organic sales increased or were unchanged in three of five business segments.
  • Core earnings per share were $0.85, an increase of 8% versus the prior year.
  • Operating cash flow for the quarter was $3.7 billion.
  • During FY 2017, P&G returned nearly $22 billion of value to shareholders as dividends, share exchanges and direct share repurchases.

Fiscal Year 2018 Guidance:

  • FY 2018 guidance continues to be incremental; top line revenue growth remains uninspiring.
  • P&G’s guidance for organic sales growth is in the range of 2 – 3%.
  • P&G expects all-in sales growth of around 3%.
  • P&G anticipates core earnings per share growth of 5 – 7% versus FY 2017 of $3.92; primarily driven by core operating profit growth.
  • The company expects the lowest organic sales and core EPS growth results to occur in the first quarter of FY 2018.
  • For FY 2017, dividends are expected to be in the $7 billion range, with additional share repurchases of $5 billion. This $5 billion does not include a $9.4 billion share reduction from the Coty sale.  
  • We expect the combination of Trian headlines, dividends and share repurchases will keep modest upward pressure on the stock while reducing downside risk if there is U.S. market correction due to a recession.

 Understanding our $96 Price Target:

  • The main drivers necessary to reach our $96 price target include:
    • Nelson Peltz of Trian Partners is “backdoored” into Proxy fight by P&G Management & Board—Nelson has strong track record of adding value for shareholders. Our sincere hope was that the Board would invite him to take a Board seat. We are disappointed that time is being wasted on a proxy fight. Trian is a large shareholder and deserves Board representation, even if management believes they already have the best plan and don’t need help. We do not believe that P&G’s current plan brings a “private equity” mindset to the company. We believe Trian can bring an additional $30 to $40/share in value to the price of the stock. Despite Trian’s recent publicity to the contrary, we do not believe they can bring this value without pushing for more aggressive headcount reductions, insisting on higher value added spending on R&D and marketing, challenging the current dividend policy where earnings are double taxed, or pushing for increased purchases of shares through low-cost debt. We believe the Board has been slow to act and has only provided leadership when forced. We believe that the P&G Board needs to be shaken up, even if P&G has the right management team, strategic plan and ensures increased accountability. We believe it’s a legacy Board from the AG days and we do not believe strong leadership has been demonstrated by this Board. We recall one of our clients who submitted a resolution to split the CEO/chair roles, and that P&G legal did everything possible to make sure the resolution was not included in the proxy. We admire David Taylor, but his leadership strength is primarily known for incremental change and steady as she goes leadership. The outside world has been changing faster than P&G. The performance has been poor. The Board, the management team, and the employees need to be challenged to do better. We believe that in order to add value, this Board needs to bring a stronger outside point of view and push, when required, for more transformational change. We just don’t see transformational leadership showing up without Nelson’s involvement on this Board. We do not see the $30 to $40 of additional share price without Nelson’s direct involvement. We believe that there is at least a 50% probability Institutional Shareholder Services (ISS) will side with Trian and Nelson will be elected to the Board.
    • Continued Cost Cutting—P&G continues to focus on driving out organizational inefficiencies. After completing a $10 billion initiative launched in 2012, P&G launched another $10 billion cost savings initiative. The company expects much of this cost savings to come from driving down the cost of goods and increasing productivity. Based on history and guidance, it is unclear what percentage of the $10 billion will go to the bottom line.
    • Sales Growth P&G is forecasting all-in sales to increase 3% in fiscal year 2018.
    • Share Repurchases—P&G completed $5.2 billion of direct share repurchases in fiscal year 2017. The company expects to buy back an additional $4 to $7 billion in fiscal year 2018. Share repurchases will continue to be a critical component of our price target.
    • Macroeconomic, Political, and Competitive Risks—P&G identified several key risks that they have not taken into consideration in their FY 2018 guidance: Significant deceleration of market growth rates, further political and economic volatility, further currency weakness, and further commodity cost increases.

 

It’s YOUR tomorrow.

Contact us for a complimentary review. For Lenox recommendations, call us at 513-618-7080 or email info@lenoxwealth.com

 

Please contact your investment and tax advisor prior to making any decisions. 

Past Performance is not indicative of future results.

This newsletter is limited to the dissemination of general information pertaining to its investment advisory/management services. This is not intended to be personalized investment advice. Please contact a Lenox adviser if you would like additional information.

Source: P&G Earnings Release 07/27/20

Deupree Meals on Wheels Non-Profit of the Month

 

Since 1989, Deupree Meals On Wheels has proudly delivered over ONE MILLION meals to homebound Cincinnati elders.

Deupree Meals On Wheels is a service from Episcopal Retirement Services, administered in partnership with the Council on Aging of Southwestern Ohio, that empowers older adults to remain in their homes by delivering hot meals, made just for them, right to their doorsteps.

Deupree Meals On Wheels is made possible through the kindness and generosity of PEOPLE LIKE YOU. Charitable donations help support the cost of food, and committed volunteers deliver not only delicious and nutritious meals to Deupree Meals On Wheels clients, but also compassionate companionship.

With your support, in 2017 Deupree Meals On Wheels will deliver over 100,000 meals to over 380 older adults.

To learn more about Deupree Meals On Wheels, please click here:

https://www.episcopalretirement.com/deupree-meals-on-wheels

Personal Debt Consolidation 

Personal Debt Consolidation 

Personal Debt Consolidation


Is it a good move post-divorce? 

Going through a divorce can be emotionally and financially painful. Now that the decree is final, what’s next? First in order should be putting your individual house in order. Exploring housing options, setting up checking and savings accounts, and dealing with outstanding debt need to be at the top of your list.

So, exactly what should you do with debt for which you were put on the hook?
    
One crucial step in getting your financial house in order is to set up a budget. After
doing so, you can determine if paying off your debt at this time is within your budget or if you need to seek alternative solutions. The primary goal should be to reduce your credit card debt as quickly and efficiently as possible. Pay off as much as you can. The longer the debt exists, the more interest expense you will pay. If your budget allows, cut your discretionary spending to allow for maximizing the pay down of the debt more quickly.
    
If there is too much debt to eliminate quickly and stay within budget, it may make
sense to consolidate your debt. What’s the best way to consolidate debt? 

Personal debt consolidation simply means taking all of your credit card debt and
consolidating it into one amount, thereby making it easier to manage and hopefully lowering the monthly payment. The key is to secure an attractive interest rate.  Discuss options with your financial advisor, attorney or other trusted personal advisor.

What about other debt that you incurred in your marriage? Even though the court may say that one person is responsible for paying off debt, creditors will still hold both parties responsible. Therefore, if your ex fails to pay, your credit score could be at risk. Make sure that all joint accounts are closed as soon as possible so that no new debt can be incurred on those cards. 

IMPORTANT:  The federal government allows you to check your credit report
annually via three separate reporting agencies. Keep an eye on your credit by
obtaining one of these reports every four months. You can get started at
www.annualcreditreport.com. 

It’s your tomorrow. Call us for a complimentary review.
Call 513.618.7080 or visit www.lenoxwealth.com to Fund A Life You Love®.

 

Important Disclosure:  This material presented by Lenox Wealth is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Investments in securities and other investment products entail risk, including the risk of loss.


 

Planning for Retirement? 6 Ways A Financial Planner Can Help

Planning for Retirement? 6 Ways A Financial Planner Can Help

Planning for Retirement?

6 Ways A Financial Planner Can Help

Starting at a very young age, we were told “save your pennies”, “spend less” – “watch your debt”, “don’t get in over your head.”

But then what?  We are not always taught how to make the most of those saved pennies –– how to protect those assets, how to invest a portfolio and how to save in the most tax efficient way.  You may not have the expertise, the time or the desire to actively plan and manage certain financial aspects of your life.  And in today’s world, the financial goals, stability and future you seek to attain for yourself and your family should not be left to chance. 

A financial planner such as your Lenox registered investment advisor can help you:

1) Set realistic financial and personal goals to help you “Fund A Life You Love” at every age and stage of life.

2) Assess your financial well-being.   Your financial planner will help you navigate your assets, liabilities, income, insurance taxes, investments and estate plan.

3) Develop a comprehensive plan to meet your financial goals by Identifying opportunities and building on strengths.  By example, at Lenox we help turn your personal strengths into financial strength.

4) Keep your emotions in check with regards to the market and its volatility.  Most investors struggle with making emotional decisions during market downturns and upturns.

5) Develop tax strategies to make sure they maximize the dollars you accumulate and get to keep in your “nest egg”.

6) “Give back” by developing strategies that allow you and your family to help your favorite charity.

You have spent a good part of your life earning and saving money!  Nice job!   Now let’s make sure that your finances are managed properly and that your assets go to work for you and your loved ones!

IMPORTANT:  When shopping for a financial advisor, there are two types, each held to different legal standards. Registered investment advisors (RIAs) are legally bound to serve as fiduciaries, which means they must put the client’s interests first.  By comparison, brokers are allowed to recommend products that pay them commissions or other sales incentives, provided they feel the products suit the client’s interests.  Do your homework and make sure you are comfortable that your choice of financial advisor is motivated only by your best interests and not by those of their firm and/or its proprietary products.

It’s your tomorrow. Call us for a complimentary review.

Call 513.618.7080 or visit www.lenoxwealth.com to Fund A Life You Love. 

Important Disclosure:  This material presented by Lenox Wealth is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Investments in securities and other investment products entail risk, including the risk of loss.

 

How To Select And Evaluate The Effectiveness of Your Financial Advisor

How To Select And Evaluate The Effectiveness of Your Financial Advisor

How To Select And Evaluate The Effectiveness of Your Financial Advisor

7 must-ask questions in the process

Selecting the best financial advisor for you and your family is and should be a serious process. Remember, when you hire an advisor, you’re handing someone an enormous and important responsibility –- the asset management and wealth management strategies for you and your family in the near and long term. He or she should come to know your financial situation better than anyone else in your life. Choosing the right person may not guarantee your financial success or the success of your family but choosing the wrong one could prove catastrophic.

Before hiring an advisor, this person or the firm should be made to answer some tough questions. This at times can be uncomfortable for you as the client. However, you should think of yourself as the CEO of family affairs and you need to think like the big boss and make an important high-level decision to hire your “family office”. If when you do the interviews, the advisor can’t give straightforward and credible answers to your tough and direct questions, then they don’t have the right stuff for the job.  Bottom line, be rigorous in the interview process and it will save you a lot of pain down the road.

Here are seven must-ask questions we suggest you pose when selecting and evaluating a financial advisor, and we’re basing this advice on a must-read book called Get Wise to Your Advisor: How to Reach Your Investment Goals Without Getting Ripped Off by Steven D. Lockshin.

#1 Can you describe your typical client?  Can you talk about the unique expertise or specific focus that you have with certain types of clients?  What’s the average account size and median account size?  What are your total assets under management? What are your total assets under advisement and how many clients do you have?

#2 Can you describe your service profile? What’s the menu of services that you offer in addition to asset wealth management and wealth management strategies? Tell me about the technology interface between you and us as your client. How many times per year will you meet with us? If special circumstances arise, will you meet with us more often? How many advisors does your firm have and what kind of team structure do you have behind the advisor to meet our needs?

#3 What licenses do you carry?  At Lenox Wealth, we have a heavy bias to being a registered investment adviser, and think you should ask someone whether they have broker's licenses or if they're registered as an investment advisor. It’s also important to ask them if they're held to a fiduciary standard. And, ask what process and procedures they have to ensure their firm remains in compliance with important legal and regulatory statutes.  IMPORTANT:  Registered Investment Advisors are legally bound to serve as fiduciaries by putting client interests first.

#4 How do you get paid? Do you get paid for the investments that you recommend? Do some investments you recommend pay you more than others? Are you paid with commissions? Are there any other forms of compensation that I should know about? Does your firm receive any payments in the form of compensation from mutual funds or other investment companies? Can I pay you a flat annual fee? Can we agree on the dollar amount in advance? Do you manage any client assets for yourself? Is there any case where you charge clients a wealth management fee or other kinds of fees aside from what I pay you? What other costs might I incur?

#5 Can you explain your investment process in plain English?  How does your investment management process work? What wealth management strategies do you abide by?  Why?  What do you take into consideration when providing financial guidance?  How closely do you look at what’s important to my family and me on a personal level when giving advice?

#6 Where will my assets be custodied? Who could move money in and out of my account? How will my accounts be titled? What level of liability insurance do you have? How do you monitor your employee's ethical conduct? Have you ever had to fire an employee for ethical conduct?

#7 Can you tell me more about your firm and the qualifications of financial advisors on staff? Do you require certain accreditations such as a CFP? Do the people with whom I’ll work have business majors or advanced degrees in business? What is the financial background of staff members? What does your firm do to plan for the future and what direction will it head over the next several years?  What safeguards does your firm have in place to ensure that my assets are protected from fraud or theft?  Can you provide a list of your credentials and background?

After the interview, we suggest that you calmly reflect. If possible, make sure that you interview at least three potential advisors, and do a cross check of the advisors’ answers. Get very comfortable with whom you think you should pick; don’t give in to pressure or rush your decision. And, if you have any questions, please feel free to call us at Lenox. We’d be glad to walk you through these questions and help you create a personalized checklist that will help you make the best decision for you and your family.

It’s your tomorrow. Call us for a complimentary review - 513.618.7080 or contact us online.

Important Disclosure:  This material presented by Lenox Wealth is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Investments in securities and other investment products entail risk, including the risk of loss.

 

Revitalize P&G — Together

Revitalize P&G — Together

A Trian Update: "Revitalize P&G — Together"

The following is an update from Trian, an investment management firm that initiated its investment in Procter & Gamble in November 2016. Trian seeks to invest in high quality but undervalued and underperforming public companies. The website below provides updates on this partnership with P&G.

"Trian believes strongly in Procter & Gamble’s potential, but the Company is facing challenges that have led to disappointing results over the last decade. As one of P&G’s largest shareholders, Trian has a keen interest in helping P&G address these challenges. This website summarizes these challenges and explains why adding Nelson Peltz to the Board will help revitalize P&G. Scroll down to learn more." - Download this PDF Report or visit this website to learn more.  

What should you expect from a financial advisor in today’s world?

What should you expect from a financial advisor in today’s world?

What should you expect from a financial advisor in today’s world?

Is it time for a different kind of conversation?

You are...

  • just starting out in a career

  • a young couple newly married or about to get married

  •  a young family planning for education and other costs

  • a business owner looking at the purchase, startup or sale of a company

  • an executive reassessing your career

  • in mid-life and planning for retirement

  • going through some major stress or challenge that has a financial impact

  • retired and thinking about your legacy and other next steps

  • a combination of the above

Wherever you are in life, you’re thinking about money.  Are you making enough?  Do you have enough put away? How much will you actually need for tomorrow?  Are you doing everything you should be doing to have the financial security you seek? 

What’s on your mind is on most people’s minds.  You’re thinking the here and now –– not just about wealth management strategies but first, how to create and build wealth.  Unfortunately, your financial advisor may be thinking otherwise.  Too often, the first question a financial advisor asks is how much money you have to invest.  That segues into what financial products he or she suggests you buy, funds to invest in, and how much you need to save each year based on same-old financial formulas.

There’s nothing wrong with that conversation other than it being predictable and your feeling it irrelevant to your situation.  It can leave you wondering how important you will be as a client if you don’t fit into the “boxes” defined by the financial advisor.  How much attention are you likely to get when the advisor wants to talk net worth and asset wealth management versus wealth creation and your bigger financial picture –– family, career, enjoying life today while preparing for retirement, business growth, etc?

Is it time for a different conversation altogether?

Let’s rewind that meeting with the financial advisor.  What if the advisor started by asking you what matters most to you in life… what your goals are… what makes you happy… how you define personal success… how you feel about your work, your passions and, of course, how you feel about money and the role you want it to play in your life and the legacy you leave. 

Those aren’t crazy thoughts.  Most of us already think about those things.  But rarely has anyone helped us make the connection between our need to make money and what matters to us at a personal level, or between what we inherently love to do and the wealth it can generate if we purposely pursue it or, in some cases, are allowed to do so (have the permission of our family, spouse, society, even from our self).

At issue here is a huge, missed opportunity to build our personal wealth, not on investment formulas and market swings but on something much bigger –– something each of us already owns. 

What if someone started with you, not your portfolio? 

At Lenox, we think about wealth in a whole new way.  We are financial advisors, managers and motivators –– yes, motivators –– who believe that optimizing wealth in today’s world relies first on understanding your values, recognizing your talents and identifying what wealth really means to you.

It’s an empowering new approach based on our belief that the true engine driving our individual success already lies within us –– our own unique personal strengths.  It’s a matter of understanding and accepting that belief, uncovering our strengths, and putting them to use in ways that build both our wealth and our happiness.

Sounds simple enough, so why aren’t we already doing this?  There are lots of reasons, but the most common may be that no one ever told us we could or should take the time to figure out or follow our personal strengths.  We go from high school or college to a career –– oftentimes following the path of a parent, or starting in and staying in a career because it’s socially acceptable, or jumping from one job to the next because we can’t find satisfaction or fulfillment –– ever chasing a paycheck versus happiness.

The fact is wealth management strategies are strongest, most doable and successful when guided by one’s personal strengths.  We’ve seen this be the case for people of all ages and income levels. We see it as right thinking in today’s world where business is undergoing profound changes and where the old way may no longer be the best way.

We think it’s time for a different kind of conversation between financial advisors and clients –- one beyond wealth management to everything wealth and life related.  At Lenox, we see our role as helping clients prepare, think differently, understand the power of self-potential, and make the positive, life-changing transformations that will let them realize they can live the life they want… and create, build and share their wealth at the same time. 

It’s what we mean by… Fund A Life You Love.  We’d love the opportunity to tell you more.

Important Disclosure:  This material presented by Lenox Wealth is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Investments in securities and other investment products entail risk, including the risk of loss.

Wealth Management Strategies that Span Generations

Wealth Management Strategies that Span Generations

Wealth Management Strategies that Span Generations

Teach your kids and grandkids how to live and to give to sustain family wealth.

 

Many people have made significant amounts of money by being successful in large corporations. In many cases, they are first generation wealthy, went to college, climbed the corporate ladder, received retirement benefits and in some cases stock options.  They saved money, generously supported their local charities, and entered their retirement years wealthy. The challenge these families now face is that 95% of wealthy families will lose that money by the end of the third generation.

How can families defy such odds and ensure future generations do not fritter away hard-earned family wealth?  Where do so many families go wrong that only 5% are able to hold onto their wealth for more than three generations?  If you’re in a similar situation, what should you do to ensure your family is successful vs. another statistic? What wealth management strategies are best suited to pass the test of time?

If nothing else, a must-do strategy is to teach your kids and grandkids how to live and to give in order to sustain family wealth.  Of all the guidance you can pass along, what an accomplishment to help future generations understand how to save conscientiously, spend wisely, and to give back freely.  What a legacy to be able to instill values that inspire your offspring to look at wealth management as not just a matter of investments or products but as a lifestyle decision and an opportunity to make an impact far beyond their personal wants and the here and now.

In 2016, Lenox rolled out a new wealth management initiative that seeks to help families teach their children and their grandchildren how to be financially successful. Our goal was to create multigenerational families, where each generation learns to save 10% per year and give back 10% to the community in the form of either time, money, or a combination of both. We call it our “Lenox 10/10 Program”.  

If you seek to create a family culture where you and your family learn to be financially successful, save, and give back, and continue this success over the next 100 years, we can help you achieve these highly commendable goals and have fun doing so.  Our Lenox family office solution may be the ideal solution to create the generational success you desire for your family.  Let’s talk.

Important Disclosure:  This material presented by Lenox Wealth is for informational purposes only.  It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Investments in securities and other investment products entail risk, including the risk of loss.

10-Year Financial Planning Roadmap for Couples

10-Year Financial Planning Roadmap for Couples

10-Year Financial Planning Roadmap for Couples

“Happy ever after” starts with these seven topics

Marriage is a wonderful thing for millions of couples, but that doesn’t mean it comes without stress, including financial stress.  The best time to discuss money, what’s important to you and your spouse in terms of spending and saving, and how to handle day-to-day money management is before you tie the knot.  However, there’s never a bad time to have the financial planning conversation.  It’s key to successful wealth management for a lifetime.

“At Lenox, we look at a 10-year financial plan for couples, but we break it into bite-size topics that can be digested and tackled one at a time,” says John Lame, CEO.  “We don’t expect couples to write down a plan today and to make all of the changes that may be needed to adopt it, starting tomorrow.  It takes time, thought and having honest conversations to get to the financial plan that both spouses will love and find doable.”

The Lenox Financial Planning Primer for Couples –– 7 topics your Lenox financial advisor will discuss with you and your spouse.  Every couple is different and has their own needs but we’ve found these seven topics to be highly beneficial in helping couples find financial harmony, security and comfort as we help you navigate wealth management and Fund A Life You Love.

1.  Your 3-year snapshot.  First step to financial planning and wealth management is how each of you see your ideal personal and professional lives looking in three years?

2.  The 4 Freedoms that come with having a financial plan: Money, Time, Relationships and Purpose.  We gladly share this thinking that comes from one of our own favorite mentors, Dan Sullivan of Strategic Coach.

3.  10/10 concept.  The goal is to save 10% of your income each year not only for retirement but also for vacations, dinners out, family fun, etc.  And, how can we help you get to the point where you can comfortably give back 10% to your community whether in time, money or both.

4.  5-year capital forecast.  We look at life’s major expenses –– house, car, vacation, education, etc. –– and explore best options for you in both the short and long term.

5.  Career planningWhat’s the outlook for your industry and your company?  What do your personal careers look like today and are you positioned to attain your career goals?  Do you know your top five strengths, and are you being allowed to use them and get compensated for them?   Do you and your spouse have the right skills, education, relationships and network in place to leverage your top five strengths?  If not, will your marriage work better if you coach and hold one another accountable, or if you engage the outside services of a career coach?

6.  Family financial planning. Have you established an investment plan to cover the future of you and your children?  Do you need to take into account parents and/or other family members who may require your financial support?  Where does your retirement planning stand?  Are you putting enough away?  Are you getting all of the matching funds available?  Are you doing all you can to reduce your tax liability?  Have you considered working with an independent financial advisor and fiduciary who can take advantage of better pricing and greater cost savings on your behalf?

7.   Other financial planning matters.  This is a great time to take a look at all of the basics –- life insurance, healthcare, estate planning, and other matters that affect your day-to-day money management and long-term financial security.  Successful wealth management lies not just in big picture thinking, but also in the proper handling of all of the details.

If you and your spouse are ready to start or restart the financial planning conversation, we’d be delighted to help guide you and get you to where you want to be. 

It’s your tomorrow. Call us for a complimentary review. Call 513.618.7080 or visit www.lenoxwealth.com to Fund A Life You Love.

Wealth Management Advice for Today’s Global Economy

Wealth Management Advice for Today’s Global Economy

Wealth Management Advice for Today’s Global Economy

5 action steps to take now

 

The global economy is complex, ever changing… and a hot topic.  There’s no shortage of opinions as to its impact on the future.  But, what’s it all mean to you, your family, your career and your portfolio… today, next week, next year?

Wherever you are in life, what should you be thinking about and doing right now to protect and grow your wealth? How do you prepare for what’s next and still live life today? If you haven’t been asking for this kind of wealth management advice, it’s time to start. The global economy matters, but what matters most is its impact on you.  This is where you and your financial advisor should be taking the conversation.  Translating the financial world to your world. Explaining what’s different today and why.  Moving from the same-old rhetoric to actual ramifications on your personal situation. Above all else, finding great opportunities out there for you, your family and your portfolio.                                                                                                                                                                                  

Wealth Management Advice:  5 Action Steps To Take Now

(1)  Understand you can expect lower returns on investments (stocks and bonds) in the near term.  These lower returns need to be factored into your financial plan. While the Federal Reserve’s strategy to lower interest rates and print money to pump up the economy has worked, the result, going forward, is lower returns. No one knows how long this market forecast will last, but better to take a conservative approach and prepare for low returns now rather than to expect high returns and be disappointed.

(2) Make a plan to offset the below average returns.

Whatever your age, the best plan for offsetting lower returns is to save more. 

Younger individuals and couples

A simple rule of thumb: save 10%. If you don’t think you can, work with your financial advisor and develop a plan to do so.  It may require you to reevaluate your career to make more money or spend less or both, but do yourself a big favor now and follow the 10% savings rule while you’re young and while the time value of money works to your greatest advantage. 

Adults with kids and grandkids

Talk to your kids and grandkids about finances and teach them to put away 10% a year.  If you can afford it, motivate the next generation by offering to match their savings on an annual basis.  Teach them to save early in life. Match their contributions to 529 Accounts and IRAs. Instilling good values around money can pay off now and for generations to come. This is truly the gift that keeps on giving! There are great books on this topic.  One of our favorites is Richest Man in Babylon by George Samuel Clason.

Retirees

If you’re living off your portfolio, ask your wealth management advisor to model out lower returns. Run the numbers to make sure you are adequately funded to live the life you desire.  Understand what you’re spending. Understand your returns and their effect so that you don’t run out of money. 

WATCHOUT:  In this environment, it’s not enough anymore to use “rule of thumb” or just run numbers on a calculator. Sequencing of returns matter. Use Monte Carlo or a database with historical monthly returns back to the early 1900’s. Make sure you know what the impact will be if you increase or decrease your allocations to equities or if you don’t include international or emerging markets in your asset allocation. Make sure you know the difference between cash going out and “real” spending.  For instance, a common error is to principle payments and premium payments on life insurance as spending. Finally develop balance sheet targets and have a plan to meet end targets.

(3) Look closely at where your money’s going.

  • Revisit what kind of insurances you have, why you have them, and what you’re paying in premiums, how much cash value should you have and when? Am I paying too much in commission?
  • Refinance your mortgage. If you haven’t already done so or rates have dropped more than a ½% since your last refi, it’s time to consider what’s available.
  • Lease or buy your car?  There are savings to be had here based on your situation, especially if you have to pull money out of an IRA to pay cash.
  • Rethink how to save and pay for education.  Have you explored 529 Plans or saving money in a tax-free, cash value life insurance policy.

(4) Find more ways to cut expenses.

Besides limiting unnecessary spending, take a close look at your monthly statements for phone service, cable TV, Internet, bank and credit card fees, tax preparation, and other routine expenses.  Watch for hidden fees and “cost creep”. Pick up the phone, question the charges and negotiate a better deal, or take your business elsewhere.  We know people who have saved thousands of dollars by taking the time to go through this exercise, as tedious as it may be.  Also, adhere to payment due dates or set up auto-payments to avoid late-payment penalties.

(5) Make sure you’re getting best rates in all parts of your financial life.

One of the great benefits of getting wealth management advice from an advisor who works as a fee-only fiduciary as we do at Lenox is that we work just for you.  Compare this to a traditional broker/dealer who has to serve the overhead, products and profits of their firm as well as the client.  As an independent, your Lenox advisor is focused on providing you exceptional financial services and guidance while working to minimize your costs –- not selling you products to increase their compensation.

Because independents don’t get paid to promote products, we can and do go to any and every vendor to find the best policy, plan or product at wholesale pricing for whatever your need –– investing, savings, insurance, banking, mortgage, autos, education, etc. 

We sit down with you and your insurance agent, mortgage broker, banker, and whoever else to negotiate on your behalf and make sure all is being done in YOUR best interest and in line with your financial plan.  In this role, Lenox is your personal “family office”.  There’s no extra cost –- just the extra care you deserve across all parts of your financial life. We are delighted to bring you Lenox Family Office –– a level of service once available only to the wealthiest of families. Now available to you because of the value of being an independent fee only advisor. Learn more.

ARTWORKS   Non-Profit of the Month

ARTWORKS Non-Profit of the Month

ArtWorks transforms people and places through investments in creativity.  Founded in 1996, ArtWorks is an award-winning non-profit organization that employs and trains local youth and talent to create art and community impact through three strategic programming areas: Public Art, including an extensive mural program; an art therapy division, ArtRx; and an entrepreneurial arm, Creative Enterprise. ArtWorks is the largest visual arts employer in the region. To date, ArtWorks has hired over 3,000 area youth, 2,000 professional local artists, and trained nearly 300 creative entrepreneurs.

Click here to visit Artworks website!

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Event Recap: What Will P&G and Corporate America Look Like in 5-10 Years?

Event Recap: What Will P&G and Corporate America Look Like in 5-10 Years?

Event Recap: The Future of P&G and Corporate America

Last Wednesday we had a great discussion on how Trian would impact P&G over the next year to two. What we know is that as far as activists groups go, they are among the best in the lot. They tend to work  very constructively with senior management and the board and  to have really great ideas on how to improve performance and get shareholder price up. Trian is not necessarily a bad thing and, in many cases, it could be something very positive.

A big part of the discussion was about "What if I work at P&G?" While we talked about stock price, stock options and profit sharing, one thing we really emphasized was-  Do you need a Plan B? For some who work at P&G, they may not have the job security they thought they might have.  The best way to deal with that is to say, "If I need a Plan B, what is it?"

This is where Lenox and our Wealth Creation Unique Process can really help. Do you know what your strengths are? Do you know where you add the most value? Do you understand where, if you left P&G, you could go where you might add value?

Lenox also has new interactive financial planning technology. We an set up a base example of where you are financially.  You are able to  go in and run scenarios on the software and consider different options. This combination of tools is designed to help the P&G employee sort things out as Trian enters the stage.

Please enjoy and share our PowerPoint presentation.

Change at GE Likely to Head Off Fight With Trian

Change at GE Likely to Head Off Fight With Trian

Change at GE Likely to Head Off Fight With Trian

Trian is a major shareholder of both P&G and GE. As was discussed in our seminar, "What will P&G and Corporate America Look Like in 5-10 Years", each employee at P&G today needs a Plan B. We can learn from what is going on at GE.

Click Here to Read More!

May 2017 Outlook on Procter and Gamble (P&G)

May 2017 Outlook on Procter and Gamble (P&G)

May 2017 Outlook on Procter and Gamble (P&G)

Current P&G Stock Outlook:

·      We are increasing our 12-month outlook to $96/share.

·      In our $96/share target, we have included a $7/share reserve for upside reflecting the positive impact of Trian Partners recent $3.5 billion investment in P&G.

·      For perspective, Wall Street analysts have an average 12-month stock price target of $91.50/share.  Analyst forecasts currently range between $79/share and $104/share. Please note there has been a $1.58 or 1.8% increase in the Wall Street Analyst average since our January 2017 outlook.

Highlights of P&G’s Quarterly Results:

·      P&G continues to deliver on the forecast, but the overall results are very incremental.

·      P&G had total organic sales growth of 1% for the quarter.

·      P&G reported third quarter fiscal year 2017 net sales of $15.6 billion, a decrease of 1% versus the prior year (this includes a negative 2% impact from foreign exchange).

·      Organic sales increased in four of five business segments.

·      Core earnings per share were $0.96, an increase of 12% versus the prior year.

·      In Q3, P&G returned $1.8 billion of cash to shareholders as dividends, and repurchased $2.0 billion of common stock.

·      In April, P&G announced a dividend increase to $0.6896 per share, which represents a 3% increase compared to the prior quarterly dividend.

Fiscal Year 2017 Guidance:

·      FY 2017 guidance continues to be incremental; the earnings calls continue to be uninspiring.

·      P&G’s guidance for organic sales growth is in the range of 2 – 3%.

·      P&G expects foreign exchange and minor brand divestitures to reduce sales growth by 2 – 3%.

·      P&G estimates all-in sales for FY 2017 to be down 1% to in-line with the prior fiscal year.

·      P&G maintained its expectation for core earnings per share growth in the mid-single digits versus FY 2016 of $3.67.

·      Consistent with the recent past, the company remains focused on total shareholder return (TSR) through a combination of modest sales growth, increased operating margins, and improved free cash flow.

·      For FY 2017, dividends are expected to be in the $7 billion range, with additional share repurchases of $5 billion. This $5 billion does not include a $9.4 billion share reduction from the Coty sale.  

·      We expect the combination of dividends and share repurchases will keep modest upward pressure on the stock while reducing downside risk if there is U.S. market correction due to a recession. 

Understanding our $96 Price Target:

·      The main drivers necessary to reach our $96 price target include:

o   Activist Investor, Trian Partners $3.5 billion stake in P&G—Trian Partners has a long history of working with Boards of Directors and senior management to bring transformational change and increased shareholder value. We believe that with Trian’s involvement, P&G will trade closer to intrinsic value and perhaps above that. We also believe that Trian will bring about faster transformational change, which could include a restructuring of the balance sheet, a possible break-up of the company and faster headcount reductions.  We believe the overall impact Trian may have on the stock is + $30/share over the next 24-36 months.

o   Continued Cost Cutting—P&G continues to focus on driving out organizational inefficiencies. After completing a $10 billion initiative launched in 2012, P&G launched another $10 billion cost savings initiative. The company expects much of this cost savings to come from driving down the cost of goods.

o   Sales Growth P&G estimates all-in sales to be down 1% to in-line with the prior fiscal year. As we look at sales beyond FY 2017, the strong dollar will continue to pose a challenge for international and overall sales growth.

o   Share Repurchases—P&G closed the Coty transaction in FY 17 Q2, which resulted in a share reduction of $9.4 billion. P&G expects to buy back an additional $5 billion in shares. Share repurchases will continue to be a critical component of our price target.

o   Macroeconomic, Political, and Competitive Risks—P&G identified several key risks that they have not taken into consideration in their FY 2017 guidance: Significant deceleration of market growth rates, further political and economic volatility, further currency weakness, and further commodity cost increases.

Recommendation:

  • Call us for Lenox Recommendations! 513-618-7080 or contact us at info@lenoxwealth.com

Here are some questions you might have if you currently work at P&G:

  • What should I know about Trian Partners and their investment stake in P&G?
  • The last activist P&G investor was Bill Ackman. How is this different? 
  • How does this impact my career outlook with P&G? Should I stay or leave?
  • If I decide to leave, am I better off leaving now or waiting?
  • If P&G has significant restructuring, will my position be eliminated?
  • Trian Partners also invested in Kraft Foods. If I use this as a case study, what can I learn?
  • If I was considering leaving P&G, should this change my thinking?
  • What processes are there to help me rethink and recreate my career?
  • How can Lenox Help?
  • What should I do next? 

We think Lenox’s FinLife Experience needs to be your next step! 

  • You need Clarity, which you can get through our Money Mind® Analyzer and Honest Conversations ® exercise.
  • You need Confidence through your personalized Financial Control Scorecard®, so you know your next move is the best move for your family.
  • You need Control, which you will get through our Client Guidebook. The Roadmap outlines what we need to do in the next 12 months, as well as many years down the road.
  • You need Coaching, so you feel like this potential change in life was the best opportunity you ever had. 
  • Lenox is a Fiduciary and unlike Broker Dealers, we only get paid by our clients, not third party fund managers.
  • We are a Family Office and provide a full menu of financial services. 
  • Find out more information about Lenox at our website: http://lenoxwealth.com 

Past Performance is not indicative of future results.

This newsletter is limited to the dissemination of general information pertaining to its investment advisory/management services. This is not intended to be personalized investment advice. Please contact a Lenox adviser if you would like additional information.

Source: P&G Earnings Release 04/26/2017

 

The Most Important Thing Warren Buffet Said Yesterday

15 years ago our team left a well-known national brokerage firm to create an independent firm dedicated to families. At that time, we committed to invest 10% in Berkshire Hathaway stock and 50% in low cost, tax efficient index mutual funds.

I  had a wonderful day today listening to Warren Buffet at the annual shareholder meeting for Berkshire Hathaway, capped off by a wonderful lunch time interview of Jack Bogle, the founder of Vanguard.

-John Lame

Click Here to Read More.

Image Source: The Motley Fool

Image Source: The Motley Fool

1N5 Non-Profit of the Month

1N5 was created in memory of Jim Miller, who died by suicide in July 2008.

Our goal is to STOP the stigma and RAISE awareness by bringing mental health education to greater Cincinnati schools.

Warrior Run 5K began in 2010 and works in partnership with Cincinnati Children's Hospital Surviving the Teens®, a mental health awareness/suicide prevention program offered to middle/high school students. The organization has donated a total of $315,000 to CCHMC in support of this program and that funding makes up nearly 50% of the program budget each year. The program currently serve 25% of Greater Cincinnati area high schools and it is the goal to serve 75% by the end of 2017.

In 2014, with the aid of former UC President Santa Ono, the organization introduced the College and High School Challenge. Through these Challenges, the organization has donated over $200,000 back to participating school to address the mental health issues of area college and high school students. During Challenges, partner colleges and high schools are in competition through student participation in the Warrior Run 5K, service hours and fundraising. Participating colleges receive $5K, high schools $2K, and they keep all raised funds for mental health program development. Winning schools receive a $1.5K scholarship to award a student who is managing a mental health diagnosis, or one volunteering in the mental health field. A Mental Wellness Week, reaching approximately 15,000 college students each year, is part of a community-wide initiative to raise awareness and funds for mental health and suicide prevention.

Since 2010 1N5 has raised over $515,000 and impacted 75,000 university students and 15,000 high school students. In May 2016, a new event was initiated: the annual 1N5 Spring4Life fundraising event, and in July unveiled www.1N5.org: a resource to detect signs and symptoms of mental illness, sources for help, as well as a place for teens to safely tell their stories. For even greater reach, we utilize social media and local billboards.

We develop relevant and sustainable mental health and suicide prevention programs for area high schools and colleges with the intent to start this very important conversation. To teach students the symptoms of mental health, what to look for not only in themselves but also in their friends, the actions to take if identified, and resources available in and outside the school to start normalizing mental health education.

1N5 aims to end the stigma surrounding mental health and start the conversation by raising awareness in schools and universities in greater Cincinnati.  Nationally, 20% of youth ages 13-18 are living with a mental health condition; 1 in 5 teens are suffering. In 2016, in Cincinnati alone, 21 youth died by suicide. We want to stop this trend. Openness and conversation are the keys to meaningful change to our youth who are in crisis. We are driven to touch the lives of Cincinnati's youth by teaching ways to connect and build community, to foster leaders and to improve and save lives.

In 2017 we plan to increase the local high schools we serve from 25% to 75%. This plan will take shape through the partnership we have with Cincinnati Children's Hospital, Mind Peace and the relationships formed with current districts we serve.

Learn more at www.1N5.org

 

 

6 Ways to Stop Overthinking Everything

Getting stuck in your head? How do you move on? Here are some tips on how to get into the right mindset and move on to more productive thinking. Challenge yourself to get there!

Click Here to Read More!

Credit: Getty Images

Credit: Getty Images

Signs You'll Never Be Rich

Wealth is about loving what you do, setting goals, saving money, trying something different! All of us have the ability to gain wealth- but we need a plan and mindset to do so. What habits can you tweak to help you get started? 

Click Here to Read!

wavebreakmedia/Shutterstock

wavebreakmedia/Shutterstock