Karp Capital Management Focus

2nd Quarter Report

Positioning Your Financial World in the Global Economy
July, 2016

We the People...

The EU and Market Take a Hit

Halfway through 2016 most of the issues we outlined in our Q1 2016 outlook for the markets remain unresolved. Time will force the market to tackle some of the issues in the coming months. The Brexit vote is behind us but the U.S. presidential election is just around the corner. The timelines are less firm for macro questions, such as economic and earnings acceleration, the direction of oil, and the next Fed rate hike. The outcome in the U.K. referendum to exit the European Union (EU) was not expected and stocks appropriately de-risked but the selling proved to be short lived and markets are nearly back to where they stood prior to the British vote. The U.K. referendum is primarily a political issue and not a financial or banking issue. It will still require resolution and that process will not be seamless. Global monetary policy is enormously accommodative and supportive of stocks but central banks around the world are reaching the logistical limits of their toolkits. This can already be witnessed in Japan where the Bank of Japan is closer to exhausting its policy options than any other major central bank. The stress is seen in the bond market where liquidity barely exists and negative interest rate policy is destroying the balance sheets of the banks. The outcome of further easing is more likely to ultimately breed deflation rather than growth, an issue that is of concern. Global fiscal stimulus in the form of structural projects and investment to spur innovation remains unlikely, but needed. Even if the economic effects of the U.K. referendum prove minimal, the level of growth globally doesn’t leave much room for error given current expectations. Just when investors thought that the bear market had started, stocks recovered. The rally elicited more skepticism and anger than enthusiasm and this negativity will continue to act as a tailwind for the markets as we climb the wall of worry. With all the headline stories of the last quarter, stock market volatility, corporate earnings, market/sector multiples, investor sentiment, and politics, the result is a fundamental risk/reward that is neutral. Patience is running out and there are many questions that need to be answered. Why has there been outflows of monies from European equities and why are treasury and global bond yields plummeting? How will stocks move higher if the dollar continues to strengthen against other currencies? What is difficult to decipher is the massive rally in the government bond market in the U.S. & abroad, which seems to be discounting a troubled future yet the stock market appears to be pricing in hope and optimism. In this installment of Karp Capital Focus we will discuss these questions and what will drive the economy and ultimately determine portfolio allocation and performance.

In This Issue:

We the People...

Market Performance

Taxation without Representation

The Federal Reserve Affects the Markets

I’ve Got Friends in Low Places

Currencies, Consumers, and Commodities

Investment Climate

Are we there yet?

Exchange Traded Funds and Passive Investing

One Prince of a Guy

What's Next for Your Business?

The Fountain of Youth

Time for a Break

Phoning It In

Follow Us Online

 

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Market Performance

Here are the performance numbers for the major indices as of 6/30/2016

Latest
1 Month

Latest
3 Months
2016
% Change
The
Close
Dow Jones Industrials
0.80%
1.38%
2.90%
17,929.99
Standard & Poor’s 500
0.09%
1.90%
2.69%
2,098.86
NASDAQ Composite
-2.13%
-0.56%
-3.29%
4,842.67
Russell 2000
-0.06%
3.79%
2.22%
1,151.92
MSCI EAFE
-3.56%
-2.64%
-6.28%
1,608.45
Long Term Treasury Bonds
6.36%
6.72%
15.49%
Gold
8.96%
6.77%
24.60%

June ended with the S&P 500 in barely positive territory, gold and volatility were the winners for the month. Long term treasury bonds (+6% in June / +7% in Q2) outperformed U.S. stocks. U.S. stocks underperformed the most, -2% in local currency in June/ flat in Q2. Small caps lagged large caps though large caps outperformed for the quarter.Telecom (+9%) and utilities (+7%) were the best performing sectors in June. Year to date these sectors are up over 21%. Energy was the best performing secor for the quarter (+11%) amid the nearly 30% rally in oil prices. Financials were the biggest laggards in June (-3%) given the Brexit fallout.
Sources: Thomson Reuters; WSJ Market Data Group, Dow Jones & Co., BTN Research, BofA ML, Ned Davis Research. Stock market indices do not include reinvested dividends.




Taxation without Representation

The Brexit PoundThe Brexit decision is arguably the most consequential political event of 2016—perhaps even more so than the U.S. presidential election in November—with far-reaching implications. The U.K. (5th largest world economy) has opted to leave the European Union (EU) however it will likely take a couple years to unwind. One of the main grievances is the burden of EU regulations, which are decided by unelected officials in Brussels. These rules, which regulate everything from the number of hours someone can work to vacuum cleaner power, ultimately stifle growth and innovation. This is a group of countries that collectively has the world’s second largest gross national product (GDP), followed by China. In fact, this could very well be the beginning of the end of the EU and should serve as a wakeup call to EU policymakers. There is no way in the long term that the EU will allow one of their biggest export markets to further disengage. The European Union, in the long run, will push to sign a free trade deal with the U.K. In addition, and this is actually great economic news, it would free the U.S. and U.K. to sign a free trade deal that the EU is now holding up. Any market volatility would be short-lived and any swing to the downside would be a buying opportunity. Brexit is not a reason to sell. There are life lessons to take away from the surprise outcome of the vote. The entitled and political elites are out of touch with the everyday citizens. Monetary policy set by central bankers around the world cannot solve the structural problems in everyday society. In order to put the world economies back on the path to growth and prosperity for the majority of citizens, real reform is needed. Other than that there will only be temporary band-aid solutions. In response to the Brexit surprise we are doing very little in the short term as we weigh the political and market response around the world. There is already talk of a ‘Frexit’ in France as potential shifts are occurring ahead of the presidential elections in April and May of 2017. When Vladimir Putin emerges as the most popular politician in the world with an 83% approval rating in Russia it is apparent the world is in desperate need of a leader with the people's interests first. We focus on risk-adjusted returns and are under no pressure to commit funds with little information about how the Brexit vote will ultimately play out. Most important, what will be the consequences for countries, sectors and asset classes. In recent months we have raised our cash level, increased our weighting to gold and defensive sectors, and limited exposure to international markets. We are comfortable that our current positioning, established prior to this historic vote, places us in good stead to weather the current market headwinds while we remain attuned to investment opportunities as market volatility rises.

The Federal Reserve Affects the Markets

Yellen Goes for GrowthEven before the outcome of the referendum in the United Kingdom, the tone of the Federal Reserve was more dovish than expected. The Federal Reserve kept policy rates unchanged at its June meeting and brought down its projections for future rate increases. While a weak May employment report and rising global uncertainty had fostered the belief the Fed would keep policy on hold, the caution with which the Federal Open Markets Committee (FOMC) addressed the economy was surprising. Fed Chair Janet Yellen and the committee’s statement suggest a mixed analysis of recent data, but the Fed’s projections still show a continued economic expansion and inflation moving up toward its 2.0% target. However, the Fed expects facilitating these forecasts will take a more gradual path of rate hikes than it thought as recently as March of this year. Even though we believe global growth is slowing, U.S. GDP is growing, but barely. In addition, weak productivity growth combines to drive continued, gradual declines in the unemployment rate. The unemployment rate is projected to fall to 4.5% by early 2018. In response to tightening labor markets, the trend in growth of hourly compensation has firmed. Growth in non-farm payroll employment has been weak in recent months, but is expected to rebound the second half of the year. The Fed planned to raise rates twice this year, but given the events in Europe this seems unlikely. The European Central Bank’s (ECB) easing as the Fed embarks on tightening may send the dollar still higher, which would be a drag on net exports and more restraint on inflation. The announcements from the Fed is more evidence that they are at the mercy of the market and short-term data, which is unnerving for an institution whose job it is to focus on the bigger picture. Without question, the Brexit will influence the action of the Fed and affect the U.S. economy. The U.S. could be somewhat insulated from the drama in Europe because it is estimated that U.S. companies generate 70% of their revenues domestically. For comparison, the percentages are 58% in Japan and 40% for Europe. Investors have focused, somewhat myopically, on the Fed’s next interest rate hike. Now, corporate earnings, the recovery in oil prices and wage growth could become a new focus. Fear of the unknown in response to global headline events are keeping many investors on the sidelines. By adopting a wait-and-see approach, the Fed clearly demonstrates its sensitivity to market volatility and global economic conditions. At the same time, by not hurrying rate hikes, the central bank should assuage fears of increasing debt burdens, especially for U.S. sectors like energy and exports that already feel the pinch of global weakness.

I’ve Got Friends in Low Places

Ever since the Great Recession, austerity has consumed the economic discourse of governments around the world. Due to policy makers’ aversion to any sort of fiscal stimulus, central banks have had to pick up the slack to maintain any modicum of growth in the global economy. Falling oil prices exacerbated the on-going threat of deflation, causing major economies to flounder on the brink of another recession, particularly Europe. Fears of ISIS’ seemingly growing influence and the refugee crisis stemming from their brutality also has the global economy on edge. To get the global economy to start spending, central banks started Quantitative Easing. Their hope was to drive down rates so that saving wouldn’t be as attractive as investing for potential future profits. Corporations have used the opportunity that cheap money provides to buy back shares and bolster their stock prices. They, too, have been reluctant to spend new capital but saved it instead. The result has been something truly remarkable. Because the low rates caused by QE didn’t stimulate the growth desired, central banks had very little left under their belt for emergency stimulus measures. Instead of keeping short-term interests rates at near zero, they took a lesson from the presidential campaign and went negative. Central banks can set rates in the very immediate term at best. From there, market demand for yield and risk calculations by investors influences rates further out on the yield curve.

Yield Curve

Meaning, if you’re being offered almost nothing to lend money in the short term you are willing to lock up monies for a longer term for a little more interest. For example, the German Bund, with a 10 year maturity, was attractive enough for investors at just .50% to counter stagnation and protect their capital from the turbulent markets and global concerns. As more issues arose and rising inflation nowhere in sight, that .50% soon became .25% and then .10%. Talks of the Brexit finally caused the capitulation and drove the 10-year bond of the most financially stable country in Europe to negative territory. The unexpected outcome of the vote in the U.K. further drove down German yields to as low as -0.17%. So why does it matter? German bond yields are not only a scintillating topic for dinner conversations, the effects of negative rates can be seen in the U.S. as well. These negative rates have made 10 year U.S. Treasuries an extremely attractive option compared to yields around the world. The U.S. is still borrowing money at rates over 1% which is by comparison, a fortune. When markets were rocked by the U.K.’s decision to leave, it sent 10-year Treasuries to a record low of 1.42%. This is going to have long-term and wide-spread ramifications. Rates have been going down all along the yield curve. 1, 10 and 30 year yields to which banks set their mortgage lending rates, are also at record lows. Financial news for the past few years has been dominated by whether the Fed is going to raise short-term interest rates, but longer-term rates are lower now than they were before the last hike. When the Fed does decide to raise the inter-day lending rate again, there will surely be a hiccup in rates but gradually international investors will flock to buy more U.S. bonds and, in turn, further drive down lending costs and the yield curve.

Until the global economy shows significant signs of growth, rates should continue to fall. Corporations will continue to finance new stock purchases and increase dividends with low-cost debt. We continue to be bullish on long term fixed income and continue to add bonds with maturities as far as 30 years out for clients’ portfolios. There has been a European flight into municipal bonds, which still offer attractive yields, relatively low volatility and diversification. In addition, municipal bonds provide tax-free income for taxable accounts at much higher yields and considerably low risk. You can find attractive yields in corporate issues, though you are taking on more risk. It’s important to build out a ladder for your fixed income portfolio to hedge interest rate risk and increase yields. While the global economy is still on the rocks, bond yields will continue to roll.

Currencies, Consumers, and Commodities

Brexit and BrokenAs evidenced by the immediate plunge in markets around the world, the Brexit was more than a bit of surprise to global investors. Something equally, if not more surprising, was the quick bounce-back to near pre-vote highs that the markets experienced to end the quarter. It wasn’t because the negative repercussions of the U.K.’s exit were quickly overlooked. As always, the markets were looking at what was coming next. With the major shake-up in the European Union, the prospects of global growth grew much dimmer. The markets are enamored by this new phenomena as evident in the Dow's 235-point surge on the last day of the quarter to cap off a multiple day surge. This brings the Dow within 90 points of its pre-Brexit highs, the S&P 500's 28-point move takes it within 20 points of its pre-vote highs, and the NASDAQ's 63-point rise pulls the index within 70 points of its pre-Brexit highs.

In addition, global rate cutting has had a tremendous impact on the currency markets. Already, the British pound (compared to the dollar) has fallen to levels not seen since 1985, first out of fear in the immediate aftermath of the ‘Leave’ victory, but further since new news of monetary easing started to surface. What does this mean to those among us who aren’t international jet-setters or don’t own a villa or resort abroad? First, it means that the dollar is going to do rather well against most of its international counterparts, boosting the consumer who has been propping up the U.S. economy for quite some time now. Your dollar will go farther and that will hopefully be enough gumption to continue fueling domestic growth. We remain over-weighted in consumer staples and consumer discretionary as unemployment ticks down and paychecks show signs of increasing. With the globe turning into a massive printing-press, it’s prudent to take defensive actions when protecting your wealth. The most tried-and-true method is to invest some of your assets in commodities and hard assets. We’ve been bullish on gold for quite some time and these recent developments not only have vindicated our stance but also strengthened it. After years of falling commodity prices, particularly gold, commodities are finally showing themselves to be the safe havens that we knew they could be. The recent volatility and projected easing has sent many precious metals in an upward direction. The firmness in commodity prices is helping the resource based stock markets and currencies of Australia, New Zealand and Canada. Over the last quarter we have added the Australian Country Exchange Trade Fund (ETF) to clients’ portfolios as our first foray this year in international markets. Oil is up more than 30%. Zinc has traded to a 12 month high. Gold is up over 23% YTD and silver has broken out to a multi-year high in a bull market rally. Investors have sought out gold as a refuge to global volatility as skepticism in the market rally continues. Gold, silver and platinum are some of the biggest gainers in the days that followed Boris Johnson’s Folly.

Investment Climate

Brexit RealitiesMoney looks for a safe haven when the possibility of a negative market event looks imminent. Bonds have rallied around the world, alongside gold and silver, on the speculation that central banks will act to limit the fallout from the U.K.’s vote to leave the European Union. U.S. Treasury yields fell to record lows as policy makers worldwide signaled their readiness to take steps to shore up their respective economies. The 30 year bond yield dropped as much as 10 basis points to an unprecedented 2.18% while the benchmark 10-year yields slid to 1.38%. To end the quarter, gold’s rally extended into its fifth week and silver jumped to its highest price since September 2014. A surge in bond prices has historically been a signal for slower economic growth ahead. Dividend stocks have been the darling of the markets this year. Utilities are up 20% year-to-date and selling for 20 times reported earnings. The rally in dividend-yielding consumer staples even influenced Mondelez to bid to acquire Hershey at a premium given their stock, used as acquisition currency, has appreciated substantially in the last year. The 4 day rally to end the week and the quarter moved the Dow 1,000 points. This ranks as the 9th largest move for the Dow ever. All of this brings to surface a healthy amount of skepticism with both opportunity and risk, as earnings season begins. We anticipate the impact of Brexit will be a new input into forward guidance for 40% of the S&P earnings. Typically, a market move like this does not happen in a healthy, rising market. In just a week the markets recovered 90% of the Brexit losses. It looks more like a textbook dead-cat bounce after a market-focused, disruptive event. It’s too early to tell if the markets are truly ready to break out with the backing of new, cheap money or if we’re gearing up for heightened levels of volatility. The markets rely upon corporate earnings to propel them higher. In a mature economic expansion, sales growth tracks economic growth. The most likely candidate for higher margins is the Energy sector, since its margins have plunged and expectations by investors are low. The odd combination of a sharp rebound in oil and continued low interest rates has resulted in leadership from cyclical sectors as well as from traditionally defensive interest-rate sensitive sectors. We are focused on investing in bond-proxy sectors Consumer Staples, Utilities, and Telecom. When combining momentum and valuation, Utilities and Telecom are favored but valuations are now stretched. At this point, we’ll be cautious as we add monies to the market. Remember, the pain of watching values plummet outweighs the euphoria of any rally. Give us a call to set up a review. It’s important that we’re kept apprised of any material changes in your financial life, especially if those affect your near and intermediate term risk tolerance.

Are we there yet?

Fixed mortgage rates in the U.S. are nearing a 3½-year low following the U.K. vote. The main reason: Investors have flocked to the safety of U.S. Treasuries, pushing interest rates lower as stocks tumbled after the Brexit vote. Mortgage rates tend to move up and down with 10-year Treasury rates, though the relationship isn’t perfect. The yield on the 10-year Treasury note was 1.46% after the Brexit vote. By comparison, at the end of 2015 the yield on the 10-year treasury was 2.27%. As mortgage rates decline, the savings are a windfall for both prospective home buyers and homeowners who qualify for refinancing. Refinancing could make sense for many people holding mortgages at rates above the 4% level or higher. Now is the time to put pen to paper and run the numbers to see how much money you can save. Qualifying for a mortgage is not an easy task. If you are a business owner or majority partner assembling the documentation could be a temporary part time job. Now is the time to start building your loan package for pricing as rates could bottom in the coming weeks. Across the country, 40% of borrowers have loans with a rate of 4.5% or higher, according to CoreLogic Inc. Because mortgage rates have been near multi-decade lows for the past six years, most borrowers who could refinance already have done so. If you haven’t found the time before now, you’re in luck and can reap the benefits of current global turmoil. Give us a call if you’d like to take advantage of the current rate environment for a refinance, home purchase, or a securities-based loan.

Exchange Traded Funds (ETF) and Passive Investing

Given the relatively flat returns over the last 20 months clients have been challenging us about index portfolios having better returns net of costs. What is lost is that passive portfolios aren’t risk free. It’s a common misconception that going passive means eliminating risk. While a broad ETF portfolio does reduce the relative risk of underperforming a benchmark, it does nothing at all to mitigate absolute risk. So when markets are tumbling, an ETF that invests in the broad market has no way to offer protection. What’s more, benchmarks are often prone to concentration risk, when a sector or industry becomes too big or too small for the wrong reasons. Second, since returns will probably be relatively low in the foreseeable future compared to history, beating the market—even by a small margin—will be especially important for investors to meet their goals. This is why cutting down market fluctuation in the short run will help your returns in the long run. The portfolios we build carry lower absolute risk because of how we allocate cash and sector rotation. This leads to better overall returns in the long run then could be achieved through passive ETF allocation alone. With these points in mind, we build portfolios for clients to suit their risk appetites and return objectives, which should do well over the long term, even in an environment of lower returns. In a volatile world driven by short-term impulses, beating the fear factor to invest in equities for long-term success really comes down to matter over mind.

One Prince of a Guy

Princely DNAAnother musical genius has left the building. Prince died in April at the age of 57, leaving behind millions of grieving fans and a musical legacy. But it's still unknown whether he left a will indicating who inherits his estimated $250 million estate - and (more important) licensing rights to his name, image, and music, which are currently worth an additional $300 to $500 million. Prince, like many creative people focused so intensely on his life's work that he neglected legal matters before dying unexpectedly from a drug overdose. He left behind no spouse or children, and both of his parents are deceased. Prince was estranged until recently from his only living sibling (his sister), so it's possible she's unaware of any legal arrangements her brother may have made over the years. So now the search is on for any estate documents Prince may have left - and any that are found would be legally binding no matter when they were written. If Prince left no will and no surviving offspring of his own, as his sister has claimed, then his estate under Minnesota law would be apportioned in equal shares to her and Prince's five half-siblings, along with the nearest surviving descendants of any siblings now dead, according to the court filing. The daughter and granddaughter of Prince's late half-brother, who once headed Prince's security detail and died in 2011, are now claiming rights to a piece of his fortune. Prince's business empire was vast and complex, so his will (if any) may still possibly be found. But the current lack of a will leaves Prince's estate vulnerable to years of legal infighting among his potential heirs. If Prince completed the proper estate planning then the man’s life behind the music would be kept private. Now Prince's personal affairs could be public record and his estate subject to a long litigation process at a tremendous cost. Given the lack of planning, Uncle Sam will get more than $100 million in estate taxes when his estate tax return is filed. With proper planning, he could have instead qualified for the estate tax charitable deduction by leaving large sums to his favorite charities. The lesson learned is there is no need to leave loved ones with a highly complicated mess while they are grieving. If your will and estate plan has not been reviewed in a few years or you have not planned for your own mortality, please call us so we can help you enjoy the peace of mind that comes with knowing that your affairs are in order. Clients often tell us what a tremendous relief it is after they put these essential estate planning documents in place.

What's Next for Your Business?

Has your succession planning come to a standstill and you don’t know why or how to fix it? Fear, confusion, uncertainty, an undefined action plan and/or dysfunction within the family or business can all be contributors. Shareholders, family members and key managers must buy-in to the transition plan or they may undermine your efforts. Fear appears in many forms. In a family or business it can encompass the fear of failing your family’s expectations or uncertainty about sufficient leadership skills. Parents may fear sharing financial information with their children because of worries over perceptions of inequality in their estate plan. A succession coach can provide guidance in discussing emotional topics without confrontation, how to stay open, asking questions and considering differing opinions without blowing up. Confusion often comes from being afraid to communicate or commit to action. Without clear communication or an execution plan, key personnel or family will become anxious worrying what is going to happen, who is actually in charge and how it will affect their security. By creating a timetable, sharing it with family, employees, your vendors and clients, and working with them to make sure it is clearly understood, you can sidestep this challenge. Uncertainty has hindered many plans. An undefined action plan can lead to skipped steps or no follow-through. The succession plan should be integrated into your strategic plan with specific and documented expectations, a timeline and ways to measure success and regular checkups. When relationships are out of alignment, people need to be heard, acknowledged and feel like they are making a contribution in dealing with important issues. Afterward, it is possible the succession plan may need to adapt to reality, rather than originally intended, but you will most likely have everyone on board, moving together. If you are dealing with multiple issues stalling your succession plan you are not alone. There are business succession professionals who can help you get unstuck. Succession requires a great team, which includes the transactional assistance from your attorney and CPA, advice from your financial advisor and a certified succession coach. As a team, these professionals can help guide your plan through the emotional issues and transactional decisions to fulfill your succession plan, and identify early warning signs to prevent a smoldering fire from becoming a five-alarm blaze. Give us a call before your succession planning hits a snag and we’ll assemble the right team to smooth out your transition.

The Fountain of Youth

There’s finally an answer to an age-old question: How can you live a longer, more satisfying life? The answer: work past the traditional retirement age of 65. A new study published in the Journal of Epidemiology & Community Health looked at the risk of dying for different age groups of Americans, and compared it to their retirement age. The researchers found that the likelihood of dying in any given year was 11% lower among people who delayed retirement for just one single year—from age 65 to age 66. By age 70, people who continued working experienced a 38% lower risk of dying than people of the same age who had retired at age 65. By age 72, the risk was 44% lower. These results seemed not to be affected by other variables, like gender, lifestyle, education, income and even occupation.

Time for a Break

As I travel around the Bay Area visiting clients I am always looking for special places to dine and decompress between appointments. It does not matter what time I pull up to the Falafel STOP I have a hard time finding a parking place in the lot. The owner, Jonathan, lives in the house behind the restaurant and is committed to giving you a dining experience. He is worried about every customer, handing out free samples when the lines are too long or asking the patrons if their fries are hot. Recently I was visiting clients in the San Jose area and needed to grab a snack in the neighborhood. As you are driving southbound in the rightmost lane on Sunnyvale-Saratoga Road off highway 280 be careful because you will come to a sudden stop as you enter the parking lot. That's why they call it Falafel STOP! There is always a short line of vehicles waiting on the busy expressway for an opening into the parking lot of the traditional hamburger stand restaurant. After you find parking you need to be prepared whether you want a meat plate or a falafel. There are two separate lines. The pita is always soft, hot and fluffy with boneless chicken, sauces, veggies, and French fries. The portions are big enough to share….but you will want your own plate. They make a true Israeli-style falafel sandwich. This is falafel with chickpeas only, no fava beans, with cumin as the predominant seasoning. Their pitas are all freshly baked in-house and doughier than you might be used to. The vegetables (fresh and pickled), tahini, and hot sauce compliment everything perfectly so there's a great blend of flavors; nothing sticking out and overwhelming the other ingredients. As far as ambience goes, Falafel STOP is a simple, comfortable, no-frills walk-up stand with mostly outdoor seating. The small kitchen is visible to anyone placing an order. You can even watch as they pour the falafel flour into a grinder to form the falafel balls before deep frying them. If you would like to have a foodie experience and you are driving down highway 280 visit the Falafel STOP at 1325 Sunnyvale-Saratoga Road in Sunnyvale. Reservations are not necessary but bring an appetite.

Phoning It In

Phone DependenceTechnology is at the point where you can do everything from an app on your phone. You can shop, order a cab, order food, or watch a movie. You’re probably already doing some of your banking on your phone, whether it’s to check your balance or pay a credit card bill. Something many of our clients might not be aware of is that through Fidelity’s app (iPhone or Android) you can deposit checks into your investment account. This comes in handy when you receive that class-action settlement check in the mail (though you’re not quite sure for what grievance you’re being compensated) and don’t want to run to the bank. It also saves you from searching for those forever stamps you bought last year to mail the check in. We recommend trying it out. Picking up a pen to sign documents may seem more like something the Flintstones would have done than the Jetsons. There are many tech companies out there with e-signature services to help you avoid the hassle of printing, signing, and scanning it back to its original, more manageable electronic form. While the technology is not quite ubiquitous and its acceptance isn’t universal it will come to pass. In the meantime, we recommend downloading TurboScan by Piksoft (iPhone or Android) for whenever you need to sign something and email it back. You may have tried to take a picture in the past but it never works out just right. This app knows that you’re taking a picture of a document to turn into a pdf, so it formats and adjusts the picture accordingly. It’s incredibly helpful and will save you the hours of time you waste trying to remember how exactly you fax something.

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All of us at Karp Capital Management thank you for your continued support over the last year. It is a privilege to help you, your family and friends reach financial goals. Please remember that we appreciate your support and we’re flattered when you refer your family and friends. If you know someone that would enjoy our commentary on the market, please share the newsletter with them. If they would like to receive our quarterly commentary please direct them to sign up for the email edition at karpcapital.com/news.

If you have any questions on the preceding analysis, or would like to review your portfolio’s performance, please call us at 877-900-KARP. At Karp Capital, we care about your financial world and how it is positioned in the global economy.

Peter Karp
Peter C. Karp

Karp Capital Management Corporation
Registered Investment Advisor

Mailing Address: 2269 Chestnut St., #308
San Francisco, CA 94123

Office Address: 221 Caledonia St.
Sausalito, CA 94965

P: (415) 345-8185 F:(415) 869-2832
peter@karpcapital.com
karpcapital.com

If you no longer wish to receive the Karp Capital Management Financial Focus newsletter, please contact us to be removed from our mailing list. Although information in this document has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness, and it should not be relied upon as such. All opinions and estimates herein, including forecast returns, reflect our judgment on the date of this report and are subject to change without notice. Such options and estimates, including forecast returns, involve a number of assumptions that may not prove valid. Further, investments in international markets can be affected by a host of factors, including political or social conditions, diplomatic relations, limitations or removal of funds or assets, or imposition of (or change in) exchange control or tax regulation in such markets. The past performance of securities or other investments does not necessarily indicate or predict future performance, and the value of investments. This document may not be reproduced without our written consent. Securities offered through Infinity Financial Services, member FINRA/SIPC. Karp Capital Management is not an affiliate of Infinity Financial Services.

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