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The Zoe Blog

Wealth vs. Income

Posted by Andres Garcia on Oct 4, 2017 11:05:22 AM

As discussed in my last blog, We're the wealthiest we've ever been... but who is 'we'?, Americans are the wealthiest they have ever been as a result of a surging stock market. But this new wealth does not drive consumer spending much, since the wealth is unevenly distributed. It turns out that 94% of stocks are owned by America’s wealthiest 10% of citizens. This matters because spending across income groups is uneven, as the middle class spends a much bigger percentage of their overall income than the wealthy.

The main driver of the U.S. economy is consumption. Therefore, an important question to ask is, going forward, what would cause the average American to spend more? Well, there are two options - one is for people to borrow more (which is not ideal) and the other is for them to see their incomes rise. And there lies the rub, U.S. wages haven’t risen much since the 1990s once you adjust for inflation.

An easier way to look at this is to split the economy into three main building blocks:

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Topics: Investment Insights

We're the wealthiest we've ever been... but who is 'we'?

Posted by Andres Garcia on Sep 27, 2017 11:10:00 AM
  • American households are the wealthiest they have ever been.
  • This current wealth is driven by a surging stock market.
  • A surging stock market does not have the same wealth effect on consumer spending as a booming housing market.

The new Federal Reserve household data showed U.S. households reached a record net worth of $96 trillion in the second quarter of this year. It is the seventh consecutive quarter in which we have reached new levels of wealth as Americans.

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Topics: Investment Insights

Nuclear North Korea - how will the US play it?

Posted by Andres Garcia on Sep 20, 2017 8:05:00 AM

In my previous blog post on North Korea, I explained how North Korea came into being, as well as the main players and their incentives in this current nuclear situation. It is now time to go through the likely scenarios going forward.

I am not going to rehash the escalation of tensions during the last eight months - the point is that tensions are escalating. The focus of this blog is around strategic options that the U.S. could apply going forward… so here we go.

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Topics: Investment Insights

Market timing vs. time in the market

Posted by Erich Reimer on Sep 19, 2017 11:08:00 AM

Let’s take a poll.

Raise your hand if you’ve ever heard someone brag about how they bought Amazon stock right before it’s share price doubled?

I bet there's a few of you. Okay put your hand down, people are starting to stare.

Now ask yourself this… was this person's success a matter of luck or skill?  We don’t know your friend, but yea it was probably luck. Maybe best not to tell him that.

As Warren Buffett once said, “The only value of stock forecasters is to make fortune tellers look good.” The short term direction of stock prices is close to random. But why? It all comes down to human psychology and the relationship between markets and volatility. 

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Topics: Personal Finance

Savvy Investor: stocks or bonds?

Posted by Erich Reimer on Sep 12, 2017 10:30:00 AM

Being the successful person that you are, your years of diligent contributions to your retirement fund, along with your well-planned mortgage repayments, have paid off – not only do you have the security that you are saving well, but you’ve managed to do so and still have a nice pile of cash in the bank! So it’s time to take it to the next level. You know you should be investing as the return for sitting on cash is super low, but you’re not quite sure what you should be investing in. To help get the process started, we’ve put together the basics of stocks and bonds. This should help you to get your head around your options and one step closer to knowing where to put your money.

Why Invest in Stocks or Bonds?

Stocks and bonds are the most popular financial assets. Almost every financial plan that’s created includes some kind of investment in one or the other, or both. But why? Is not like they look like Zac Efron or Margot Robbie, so why all the fuss? The three main reasons for their popularity is their liquidity, tax and diversification benefits (sorry, I know... buzz killer).

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Topics: Personal Finance

Nuclear North Korea: the full scoop

Posted by Andres Garcia on Sep 7, 2017 11:45:54 AM

When asked by the press and clients what investors should do as a result of North Korea’s escalating threat, I have answered “Do Nothing”. Now, this is not a result of disinterest in the topic. My father was an ambassador to the United Nations in the 1990s, with his area of expertise being nuclear non-proliferation, so while for most people Sunday evening dinner conversations touched on the Giants or the Yankees, for us the time would be spent getting into the weeds on the situations in Iran, Iraq or North Korea. (This also partly explains my lack of friends in middle school.)  Additionally, in my last role at JP Morgan, I got to learn about geopolitics within an investment framework from my mentor George Iwanicki, who is a prolific global historian (second only to my dad). In other words, I know enough to know that this topic is complicated and thus it is very difficult to predict a particular outcome… and even more difficult to predict how the markets will react.

Nevertheless, despite the North Korean developments being difficult to predict, it is important as a global citizen to understand what is going on. So here goes my shot at providing some context.

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Topics: Personal Finance, Investment Insights

What is the market?

Posted by Erich Reimer on Sep 5, 2017 11:33:17 AM

Whenever you turn on the TV or read a newspaper you will undoubtedly see someone talking about how the “markets” are up, down, flat, upbeat, sad, or some other kind of movement or mood description.

However, what do they really mean when they are talking about the “market”? They are not talking about the local grocery store’s traffic or the overall economy. Rather, the “market” is a broad, but particular, snapshot of the investing world.

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Topics: Personal Finance

Team Lannister vs. Team Targaryen: Who Should the Iron Bank “Bank” On?

Posted by Dillon Ferguson on Aug 28, 2017 2:02:50 PM

When we consider the major players in the Game of Thrones, the Iron Bank of Braavos definitely isn’t the first to come to mind! But the biggest bank in the Seven Kingdoms shouldn’t be underestimated. Back in Season Four, Tywin tries to explain the importance of the Iron Bank to Cersei:

“One stone crumbles and another takes its place and the temple holds its form for a thousand years or more. And that’s what the Iron Bank is, a temple. We all live in its shadow and almost none of us know it. You can’t run from them, you can’t cheat them, you can’t sway them with excuses. If you owe them money and you don’t want to crumble yourself, you pay it back.”

Even Tyrion Lannister agrees that the Iron Bank has significant power, “If we fail to repay these loans, the bank will fund our enemies. One way or another, they always get their gold back.” If Tywin and Tyrion agree that the Iron Bank is significant (and they didn’t agree on much) we know they are a force to be reckoned with.

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Topics: Personal Finance

Financial advisors, the tell-all series. Part 4: Do I need a financial advisor?

Posted by Andres Garcia on Aug 23, 2017 10:47:00 AM

In Part I of this blog series we outlined the different ways in which financial advisors make money, in Part 2 we looked into the differences between a broker and a registered independent advisor (RIA), and in Part 3 we discussed what value a GREAT advisor offers to their clients.

That’s great and all, but do YOU fit the description of someone that needs an advisor?

In this blog, Part 4, we provide a couple of profiles, all with different personal financial situations and needs. These examples are not meant to be recommendations or to cover every scenario under the sun, but rather to serve as a starting point on the journey of financial-awareness.

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Topics: Personal Finance, Financial Advisors, The Tell All Series

Financial advisors, the tell all series. Part 3: What Makes For A Great Advisor?

Posted by Andres Garcia on Aug 15, 2017 11:02:00 AM

In Part 1 of Financial Advisors, The Tell All Series, we outlined the different ways in which financial advisors make money and in Part 2 we looked into the differences between a broker and an independent advisor (RIA).

In this post, Part 3, we dive into what value a GREAT advisor offers to their clients.


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Topics: Personal Finance, Financial Advisors, The Tell All Series

*All investing is subject to risk, including the possible loss of the money you invest.

**The projections or other information generated by Zoe Financial, Inc. regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.


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