As we enter the fourth quarter of 2018, it is that time of year to begin looking for end-of-year tax planning opportunities, particularly in lieu of changes to the tax code last year. Additionally, one of the most important decisions for a portfolio is asset allocation – and ensuring that it aligns with a person’s need, willingness, and ability to take risk. We are always happy to assess and reassess if your investment strategy is congruent with your goals and time horizon.

In August, the US stock market became the longest bull market in history, supported by an economy that grew by approximately 4% in the second quarter, as well as very strong corporate earnings growth. International and emerging market stocks found some footing in the third quarter, but still trailed due to trade wars, tariffs, as well as weakening foreign currencies, particularly in Turkey and Argentina.

Turning to fixed income, higher interest rates and a third rate hike this year by the Federal Reserve have acted as a headwind to bond returns. The third quarter returns across the major indices were approximately as follows: S&P500 (+7.7%); MSCI ACWI (+4.4%); AGG (-0.1%). [1] 2

With investor sentiment high and the outlook appearing positive, it is advantageous to review your goals and strategy before rather than after volatility. While the holdings in many of the IEM portfolios have changed in the third quarter due to our transition to Commonwealth Financial, our investment philosophy is consistent: maintain well-diversified portfolios, keep costs low, prioritize tax efficiency, and stay the course.

Your team at IEM,

Daniel Schoenecker, CFA



Ted Smith, Amanda Johnson, Charley Stewart, Danica Goshert, Dan LaNasa

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[1] S&P500, MSCI All Country World Index, Barclays US Aggregate Bond Index

2 Morningstar All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results.

Traditional Values.

Forward Looking Capabilities.

You have heard it from me before – Clients First. Always. Over the past year I have reflected on how to continue to provide this commitment in our daily work, understanding that simply maintaining the ‘status quo’ is not enough. This is especially true as we begin to work with our clients’ children and grandchildren, who may have different expectations on how they would like to interact with us. Tough questions had to be asked, and answers wrestled down. How do we move deliberately forward, but make sure that we hold on to the essence of IEM - the traditional values of how we’ve worked with you - that confirms your centrality to us?

Our questioning led to the conclusion that in order to continue to meet and exceed the expectations of our clients (who now span across three generations) we need to accelerate our pace of improvement and broaden our capabilities. We need to talk to you more, expand our product-service solution set, develop new skills to address your financial concerns, improve our human resource and technology capabilities, and become more efficient with everything we do behind the scenes so that we can dedicate more time to you. 

Over the past year we made adjustments so we can continue to confidently live up to “Clients First. Always.” The Private Wealth Managers and I continue to expand our knowledge in the areas that are important to you – estate planning, philanthropic giving, tax planning, and asset protection; and for complex cases we have developed a network of experts available to consult with you on legal, tax, health care and real estate matters. We embrace a team culture so that you benefit from differing perspectives and expertise, continuity, breadth and depth of relationship with IEM. Our Client Service and Financial Planning Team members are all highly-qualified and passionate about contributing to your positive IEM experience.

These improvements will be even more noticeable with the transition of our business affiliation to Commonwealth Financial. We are grateful for your trust and patience as we work through this process; the short-term disruption has already been outweighed by significant technological improvements. If we had any questions about this, they were put to rest when some of our most technology-adverse clients emailed us - through the new system - to applaud the ease of use and thoroughness of Investor360, our singular IEM client portal.

Please know that we appreciate your support, encouragement, and loyalty as we look to the future. We will preserve and protect our close relationships with you, even as we adjust course. We will continue to find ways to be of value to you and your family. We have embraced the challenge and invite you to continue to enjoy the results.

Ted

One of the newer members of the IEM team, Noah has already impressed all of us with his methodical approach, accuracy, and willingness to step in and help colleagues – he is a team-player through and through.

Noah joined IEM in early 2018 and his hard work has already been recognized through his promotion to Manager of the Client Services area. He has worked in the financial services industry for several years and has experience working with both individual and institutional clients. Also registered, Noah takes the lead on placing trade orders and making sure that clients’ transactions are correctly placed.

Personally, Noah has had a busy year! In June he and his wife, Sonia, had their wedding and took a long-planned honeymoon to Hawaii. His other outside interests include brewing interesting flavors of beer and kombucha, and appreciating the arts.

Noah grew up in Carver, MN, and earned a Bachelor of Arts in Economics from Minnesota State University – Mankato. He holds the Series 7 and Series 66 registrations. 

IEM in the Community - Hold Your Horses

On September 23, IEM participated in the "Hay There!" family event and fundraiser for Hold Your Horses. This organization, founded and run by Janet Weisberg, use horses to provide a variety of types of therapy for children and adults who have physical, cognitive or sensory impairments. They also provide restorative therapy for caregivers. IEM selected Hold Your Horses for a donation because of their commitment to making life better for those who face daily challenges. Learn more about their work or how you can help HYH touch more lives:  https://holdyourhorses.org/ .