Quote of the Week

“You can’t always change the people around you, but you can change the people around you.”

Technical Corner 

Stocks declined last week, with U.S. politics dominating the news headlines. House Democrats announced the initiation of an impeachment inquiry into President Trump.  Impeachment would require a supermajority vote (67 senators) in the Senate where Republicans maintain control, making the chances of an actual conviction less likely.

Meanwhile, the news today for the economy was not good, The Institute for Supply Management factory Index (ISM) for September fell to 47.8 from the August reading of 49.1. Anything less than 50.0 is considered contractionary. The Index was as high as 60.8 just last September. The downward rate of change is increasing. I can quote you many more declining economic indicators, but needless to say that the U.S. and the global economies are slowing, which as you know will not be good for corporate profits which drive stock prices.

The estimate for corporate earnings is estimated to come in basically flat for this last quarter, which is down from 24.0% growth in the third quarter of 2018. Remember when corporate earnings rise, stock prices generally rise, and when corporate earnings decline stock prices generally decline.

The third estimate of U.S. GDP growth for the second quarter was released last week, confirming the previous estimate of 2.0%. This number may look low, but it is actually pretty good considering that analysts at the Federal Reserve Bank of San Francisco recently estimated the new normal pace of U.S. GDP growth to be between 1.5% and 1.75%. This is a far cry from the 2.4% average of the last 10 years, the 3% that once was considered normal and certainly the 4% that the Administration thought possible after the massive tax cut and spending bill passed in 2017.

This next quarter could be a rocky ride for the stock market. I don’t see anything to cause the markets to go up. We are still maintaining our position in fixed income. If the economy continues to slow, interest rates should decline and our fixed income position should benefit. Remember bond prices rise when interest rates decline.

Larry’s Thoughts

This week for My Thoughts I would stray from financial talk to a reprint of an article by Marilyn Heins. I have always admired her insightful thoughts. I found it to be a great lesson on owning a dog and the benefits that a dog gives back.

Walking a Dog Promotes Health. Ensures Social Interaction

By Marilyn Heins

SPECIAL TO THE ARIZONA DAILY STAR

‘Should we get a dog?’ I have received and answered many questions like this from parents wondering about the pros and cons of dog ownership for their children.

It’s a big decision. You are inviting a living creature to live with you for the next 15 years or so if you choose a puppy. Issues to consider are safety for both the family and dog, work (who will care for Fido?) and expense.

Safety? Most diseases are species-specific (we have our viruses and dogs have theirs) but dogs can transmit certain skin conditions like ringworm and scabies. Regular checkups at the veterinarian keep both dog and human safe. Choosing the right dog in terms of size and breed and training the dog to behave can prevent bites.

More work? You betcha! Someone has to buy the food, feed the dog, clean up messes, train the dog, walk the dog, take the creature to the vet, etc. The pet will definitely add items to the expense side of your budget: food, toys, collars, licenses, pet door or cat box, veterinarian bills, neutering.

But there are many special gifts a dog can bring. People get a very special type of unconditional love and affection from a dog. A canine creature makes eye contact, wags its tail, and is always ready to play. That’s what distinguishes them from wolves and why we have been feeding dogs for so many millennia!

Many dogs seem almost human in their ability to sense what a person is feeling. Years ago, I had just learned of the death of a dear one living far away and started crying. My dog came over to me, put her head on my knee, and then reached up to lick the tears off my face.

A dog is great to talk to. Some children tell their pet their sad or lonely thoughts while others ‘rehearse’ speeches they later will make to friends. A pet dog can be a non-stressful part of a child’s life in a stressful world.

Pets can help young children deal with fears. Our dog always joined the children in crawling in our bed when a thunderstorm started. My son would tell the dog not to be scared … it was only thunder. By telling this to the dog he began to master his own fears.

Pets can help children separate reality from fantasy and can be important pretend figures. My daughter stuffed our remarkably cooperative cat into doll clothes and wheeled her around in the buggy. Pets are not inert like a doll. They tell you when you have gone too far, or they have had enough. They can help children learn about being gentle and develop respect for living creatures of another species.

Research confirms that the presence of a pet has a positive effect on children. Those who live with pets have higher morale and better health status than those without pets.

These days I am asked about the pros and cons of dogs for the elderly.

My answers are pretty similar in many respects to those above. But there are some differences.

In our age group, roughly 65 to 105, dogs can be a positive and healthful addition to our lives. They can bring us friendship, purpose, and joy. They can serve as canine ‘therapists’ for those of us who are feeling lazy or blue.

Are they good therapists? According to Dr. Marwan Sabbagh of the Cleveland Clinic Center for Brain Health, ‘Simply petting an animal can decrease the level of the stress hormone cortisol and boost release of the neurotransmitter serotonin, resulting in lowered blood pressure and heart rate and, possibly, in elevated mood.’

We are a herd mammal. The older we get the harder it is to herd. By circumstance or by choice, we find

it harder to get out and socialize. Those of us who are caregivers of a loved one can also be overwhelmed and isolated by their duties. Both can be cheered by the presence of a dog who exudes unconditional love.

Other pluses? I know from personal experience that a dog is the best ‘alarm clock’ for a grieving or lazy oldie. Walking a dog may be the best exercise of all for us. It exercises both you and Fido. It almost guarantees social interaction both from fellow dog walkers and solo neighbors. The late Mindy, my adorable King Charles Cavalier spaniel, greeted every dog and person in the neighborhood.

She even wrote a poem that I saved for posterity: ‘I’m the king of the castle, and at the top of the hill, I drop my royal pooplets to give my subjects a thrill.

The lady I live with who walks me, always pick them up, lest the people think I’m just a common pup.

But I feel like a Royal Canine, and always look the part, and love keeps overflowing from my royal heart!’

As the Cleveland Clinic suggests, ‘Get your six legs out there!’ Walking a dog not only provides you with exercise but can even help your brain keep healthy.

Therapy and Service dogs can also be of great help those of us in Geriatrica with specific needs.

It is essential that you pick your dog carefully. An orthopedic surgeon I know points out that big dogs and exuberant poorly leash-trained small dogs can cause us to fall and fracture a bone. Bad for the elderly. Getting an older dog with a good temperament from an animal shelter can be perfect. It benefits two species, human and canine, at the same time!

Thinking realistically, it is important to protect your dog from ending up in an animal shelter when you are no longer able to care for it or not around anymore. I arranged with my daughter, also my executor and a dog owner and dog lover, to care for Mindy if it became necessary.

For spouses and children of an elderly person, beware. My veterinarian husband pointed out that using a dog as a Christmas present is not always a good idea. It’s like an arranged marriage in a tribe of humans that picks their own mates. Be sure your gift will be appropriate and appreciated.

My late husband had made it clear that he did not want another dog after his beloved Brittany spaniel died. As he became sicker, I felt I needed a dog. My niece arranged for Mindy to be shipped to me from Texas as Mindy was perfect for me. She had been living with the breeder who had hoped to show her but she did not weigh enough to be shown. She was 6 months old and trained.

I had concocted a fib that the dog was for my niece if objections were raised. When I brought Mindy into the house, my husband asked, ‘Whose dog is this?’ as Mindy gently jumped into his lap and kissed him. ‘Ours if you like her.’ ‘Like her? I love her!’

The feeling was mutual. When my husband was on home hospice care and became bedridden, she jumped onto his bed and kept a canine vigil. When he died, she licked my tears. I whispered RIP to each one when they left me.

Dr. Heins is a pediatrician and the founder and CEO of ParentKidsRight.com. She welcomes your questions. Email [email protected].

Heins, Marilyn. “Things to Consider When Deciding on Getting a Dog.” Arizona Daily Star https://tucson.com/lifestyles/parenting/marilyn-heins-things-to-consider-when-deciding-on-getting-a/article_e0046f49-b805-52b1-858b-04acd87e6df8.html.” Accessed 24 September 2019

By the Numbers

ALMOST A MILLION BUCKS – If the nation’s aggregate net worth of $113.5 trillion was spread equally across all 122.5 million US households, every American household would be worth $927,000 (source: Federal Reserve).  Michael A. Higley, BTN 09-30-2019

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These are the opinions of Larry Lof and Stephanie Mayoral and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.

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Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.

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