“If by the liberty of the press were understood merely the liberty of discussing the propriety of public measures and political opinions, let us have as much of it as you please: But if it means the liberty of affronting, calumniating and defaming one another, I, for my part, own myself willing to part with my share of it.”  — Benjamin Franklin (1789) – writer, printer, scientist, inventor, political philosopher, postmaster, humorist, civic activist, statesman, and diplomat.

Dr. Franklin, one of our greatest founding fathers, stated that Argumentum ad Hominem (a type of argument that sidesteps the topic of discussion and instead attacks the character of the opponent in the debate) was not fit for civil discourse.  Sadly, this rhetorical device is used all too often these days.  As the war of the words rages on during this political season in our news media, our economy and securities markets have actually performed surprisingly well.

Our Stock Market – The Dow Jones Industrial Index passed a new milestone, crossing over 27000 for the first time ever, closing up 227 points, at 27088 on July 11, 2019.  The S&P 500 approached its own new milestone, closing at 2999 on the same day.  Looking back to an earlier high, the S&P 500 broke 300 on March 23, 1987.  The S&P 500 index rose 1.19% in the Third Quarter of 2019.

The Economy – The biggest economic news in Q3 was the growing trade dispute between the U.S. and China.  U.S. complaints include China’s ongoing theft of our trade secrets, manipulation of their currency, the yuan, and barriers to our entering their markets.  Trade secrets are protected by our patent laws.  The Chinese ignore these laws by either reverse engineering our products or by hacking into our corporations, blatantly ignoring our patent protection laws.  The Chinese currency, the yuan, can be manipulated by them at any time.  China, being a totalitarian government, ignores the market valuations of their currency to suit their needs.  A lower yuan makes their imports to us cheaper and our exports more expensive to Chinese buyers.  For decades China has taken advantage of other nations by employing trading dishonesty.  In early October President Trump and Vice Premier Liu He met at the White House to discuss an incremental trade agreement.  They began with one step and will continue to meet over time in an effort to conclude an overall trade agreement that would be agreeable to both sides.

Looking Ahead – Our American stock and bond markets have performed well on average over the past ten years.  From the lows of 2009 to the present highs of 2019, the domestic stock markets have rewarded many who held on throughout the decade.  The closing value of the S&P 500 on January 1, 2009 was 865.  The closing value on January 1, 2019 was 2,607.  Those who were winners bought and held on.  Those who day traded might have done better or worse.  In my opinion day trading is exhausting and fraught with danger.   A ten-year positive move is not an anomaly, but it’s not the norm. 

Sue, Alecia and I have considered the historic data and believe this is a good time to review the exposure to risk in our clients’ portfolios.  Consider the probability that stock markets will continue to grow at the same pace they have in the recent past.  The higher it goes and the longer it goes up, the more a decline is a possibility.  Interest rates have stayed very low for a long time.  At the first whiff of inflation interest rates will likely increase.  Increasing interest rates are unfavorable for stocks.  Political winds are increasingly blowing in the direction of higher taxes and more government control.  These two forces are counter to corporate profitability.  Every portfolio should be reviewed at least yearly and rebalanced when necessary.  But perhaps the most important is this…our clients from 2009 are now ten years older.  According to many in the financial advisory community, the older one becomes the less aggressive one should be. 

At Brimmer Financial/National Securities Corp. we have access to the world’s largest money managers, such as Black Rock (the largest manager in the world), Vanguard, Fidelity, Calvert, Eaton Vance, Prudential and most of the well-known managers of mutual funds and exchange traded funds.  The managers with the best long-term performance records and the flexibility to help our clients are the arrows in our quivers.  Our clients have accumulated assets and want these assets to serve them well throughout their lifetimes and to be able to pass on to the next generations their good fortunes.

At Brimmer Financial we help families and small businesses achieve their financial goals.  Our team includes Susan Lemieux, Owner and Manager of Brimmer Financial, RR, IAR; Bob Brimmer, Certified Financial Planner™ professional, RR and IAR; and Alecia Wright RR, B.Sc. Mathematics, University of the West Indies. 


The opinions expressed herein are those of Robert Brimmer of Brimmer Financial and are current as of this report’s posting date.  This commentary is general in nature and should not be construed as investment advice.  Opinions are subject to change with market conditions.  The views and strategies may not be suitable for all investors and are not intended to be relied on for legal or tax advice.  Please note that any investment involves risk including loss of principal.  Interest rate risk is the possibility that the value of an investment will decline as the result of an unexpected change of interest rates.  Securities offered through National Securities Corp., member FINRA/SIPC.  Advisory services offered through National Asset Management, an SEC Registered Investment Adviser.  Fixed Insurance Products offered through National Insurance Corporation.


“A wise and frugal government … shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government.” – Thomas Jefferson (1801)

 From the U.S. Bureau of Labor Statistics:  Median weekly earnings of the nation’s 117.6 million full-time wage and salary workers were $908 in the Second Quarter of 2019 (not seasonally adjusted).  This was 3.7% higher than a year earlier.  The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in April and 0.1 % in both May and June on a seasonally adjusted basis.  Over the last 12 months, the All Items Index increased 1.6% before seasonal adjustment.  Our inflation rate is very low.  And that’s a good thing.  The U.S. Labor Department reported that in April the unemployment rate was 3.6% in April, 3.6% in May, and 3.7% in June, 2019.  Unemployment numbers are at roughly 50-year lows in America.  Just about everyone who wants a job can find one

The U.S. Federal Reserve has left little to the imagination about their intentions on rates at their July 31st meeting.  Fed Chair Jay Powell delivered a speech in Paris recently where he reiterated that the Fed will “act as appropriate” to keep the U.S. economic expansion going.  He also noted a few key global concerns that are adding “uncertainty” to the economic outlook in the U.S. and abroad, including the U.S. Federal Debt Ceiling; a prolonged shortfall in U.S. inflation; and Brexit.  Federal Reserve Bank of New York President John Williams said this week: “When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress.”  The only real question now seems to be will they cut 25 or 50 basis points? [One basis point = 1/100 of one percent.]  US-China trade has faded somewhat into the background.  Investors anticipate the present truce persisting for the foreseeable future, with existing tariffs staying in place but incremental ones being implemented” –  SOURCE – ARTHUR HOGAN, CHIEF MARKET STRATEGIST, NATIONAL SECURITIES CORP.  MORNING COMMENTARY FROM JULY 24, 2019

The S&P Index crossed 3,000 for a few hours on Wednesday, July 10th, for the first time ever as Fed Chair Powell was testifying before Congress.  On Thursday, July 11th, the Dow Jones Industrials crossed over 27,000 for the very first time.  Do these positive results in market performance portend another time of Greenspanian “Irrational Exuberance,” or just the continuation of an aging Bull Market?  We can’t foretell the future until it has become the past. 

At some point the pundits will dissect the most recent data and pronounce a concluding diagnosis, as they always do.  But how does that help?  What’s an investor to do now?

We can start with what we know of past Bull and Bear Markets.  Bull Markets start to grow during pessimistic times.  They mature during good economic times and begin to die during times of euphoria.  Then, at the next point of maximum pessimism, the next Bull Market is born.  This up and down cycle was recorded in a book by Charles Mackay called Extraordinary Popular Delusions and the Madness of Crowds, first printed in 1841.  It may be the best book ever written to describe crowd psychology.  Mackay describes some of the best known cases of market insanity, starting with the Dutch Tulip mania of 1634, when newly discovered tulip bulbs were temporarily worth more than gold.  A number of other get-rich-quick popular schemes during the 18th and 19th Centuries are described and analyzed.  At this time, there are no wacky popular delusions of any consequence, in my opinion.  Well, maybe Cryptocurrency, which is a form of money that has no country or bank to back it up.  Bitcoin was the first of these digital mediums of exchange. 

The increasing Federal Debt is not a delusion in the usual sense.  It’s more like a very bad case of wishful thinking.  It goes something like this: “If we don’t have to solve this debt thing right away, we can kick the can down the road and let someone else deal with it.”  Sadly, those some ones will be our children and grandchildren.  All states except Vermont have balanced budget laws.  But Congress is perpetually incapable of balancing the Federal Budget.  Maybe we should elect politicians who want to run a fiscally sound nation.  Despite the increasing national debt, shares of stocks have performed well over the past decade, mostly because of demand.  Bonds have also done well because interest rates have not gyrated up and down during the past decade. 

In my opinion, this may be a good time for some of our clients to take some profits off the table and reallocate proceeds of these sales to more conservative, income-producing securities.  Sue, Alecia and I have noticed that the so-called Responsible Investments are gaining in popularity with investors who want securities that embrace high environmental, social and governance (ESG) standards.  During 2016 more than $ 8.7 Trillion was invested in ESG securities.  We believe our clients should consider including some of these ESG investments in their portfolios.  It’s always a good time to call our office (508) 240-0320 to schedule a review of your current investments.

SOURCES: Thomas Jefferson; US Bureau of Labor Statistics; US Labor Dept.; US Federal Reserve; Arthur Hogan, Chief Market Strategist, National Securities Corp.; Charles Mackay – Extraordinary Popular Delusions and the Madness of Crowds;  US Federal Debt Clock.

The Views and opinions expressed herein are those of Robert Brimmer of Brimmer Financial and are current as of this report’s posting date.  This commentary is general in nature and should not be construed as investment advice.  Opinions are subject to change with market conditions.  The views and strategies may not be suitable for all investors and are not intended to be relied on for legal or tax advice.  Please note that any investment involves risk including loss of principal.  Interest rate risk is the possibility that the value of an investment will decline as the result of an unexpected change of interest rates.  Securities offered through National Securities Corp., member FINRA/SIPC.  Advisory services offered through National Asset Management, an SEC Registered Investment Adviser.  Fixed Insurance Products offered through National Insurance Corporation.


The U.S. economy grew at a solid 3.2% annual rate in the first three months of 2019, a far better outcome than expected, overcoming a host of headwinds including some global weakness, rising trade tensions and a partial government shutdown.

“The advance in the gross domestic product, the broadest measure of economic health, marks an acceleration from a 2.2% gain in the previous October-December period, the Commerce Department reported. However, about half the gain reflected two factors not expected to last – a big jump in stockpiling by businesses and a sharp contraction in the trade deficit.

“The first day of trading this April looked interesting, similar to the last week of this past March. During the last week of March, 2019, the Dow Jones Industrial moved higher by 426 points. During the first week of April the Dow gained 1.27%. The S&P 500 Index increased by 1.16%. That’s impressive when you think about where we were four months ago when stocks suffered their worst December since 1931. Newton’s First Law is ‘A body in motion will remain in motion until acted upon by an outside force.’ The S&P 500 is now just off its record high from last October.”


What outside forces now exist that are exerting pressure on our economy and the markets? At first glance there are no storm clouds in the sky and no rumbles of thunder in the distance. Outside forces that usually move markets and economies are interest rates, inflation, tax law changes, domestic and international trade, fear or greed. Right now both interest rates and inflation are tame. The recent Federal Income Tax decrease has benefited our economy. Whenever taxes are increased, more of our income is directed to government spending. Whenever our taxes are decreased, more of our income is ours to keep and spend as we wish. An issue that may impact the stock market is the ongoing trade negotiations with China.

All markets go through cycles. That’s just the fact – Jack. The stock market is the market followed most frequently. The Standard and Poor’s 500 Index has grown on average by about 10% per year over the past 90 years. This includes the depths of the Great Depression and all of the boom times. For those who understand these ups and downs and are willing to not sell out at the bottom and then buy back in at the top, stocks can be an asset class well worth holding and adding to throughout one’s life.

Tel: (508) 240-0320 FAX: (508) 240-2309 www.brimmerfinancial.com

Securities offered through National Securities, Member FINRA/SIPC – Financial Planning and Asset Management offered through National Asset Management, Inc. – Life and Health Insurance and Annuities offered through National Insurance Corp.


The final three months of 2018 experienced volatile financial markets, political turbulence and fear among investors, especially those within ten years of retirement.  But as rocky as the final quarter was, the Standard & Poor’s 500 Index only dropped 6.2% for the full year.  The Dow Jones Industrial was down 5.5% in 2018.* Not positive, but not bad enough for an H.G. Wells-style novel about our world’s end.  For those of us who have slogged through at least two bear markets, 2018 wasn’t even a baby bear.  I think it was more like a playground for those nefarious computer programmers who set their machines to sell when many are selling and to buy when many are buying.  Think of this type of market as a stock car race.  Each driver is trying to beat all the other drivers, while the patient investors sit safely in the stands, high above the fray.  When the race is over, the spectators can come down from their observation perches to resume a more rational pace of buying, holding and selling.  We can expect a down market every few years, maybe twice in a decade.  We expect that they will arrive, but nobody has been able to figure out, with any consistency, when the winds will blow.  One of my favorite sayings is: “Stocks can go down but they have never stayed down.”

Now, what might make a market, any market – securities, real estate, precious gems, etc. go up or go down?  Well, let’s start with the simple Law of Supply and Demand.  When something is desired but is in short supply its price increases.  When something is desired but is very plentiful, its price decreases.  This simple law is in effect every minute of every day all over the world.  It’s what makes commerce work.

“We must take human nature as we find it, perfection falls not to the share of mortals.” —George Washington (1786)


Is your investment strategy as socially and environmentally responsible as you are?

It’s not uncommon – Many a well-educated, socially conscious, environmentally friendly investor winds up buying shares of companies whose beliefs and business practices are far removed from their own.  Why? Often investors simply haven’t thought about merging their personal beliefs with their investment strategies.  Some may not even be aware of where and how their money is invested.

Is it that big a deal? – Only you can answer that.  What matters to you may not matter to the next guy, and vice versa.  But consider this – when you invest in a company you own part of that company.  What you need to consider, based on what the company does and how they conduct business, is whether you would feel comfortable being a partial owner of that company.

Voting with your wallet – How we invest or don’t invest our money can be a significant statement of our beliefs and personal principles.  For example, if someone is strongly opposed to gambling or pornography, they could choose not to invest in any company that contributes to those industries.  If everyone who opposed those industries sold (or didn’t purchase) shares from those companies, that could potentially send a powerful message.  On the flip side, if someone firmly believes in eco-friendly alternative energy sources, they could choose to invest in wind farms rather than big oil (for example) as a way to show their support.

The trade-off – Investing according to your beliefs and convictions can definitely affect your rate of return.  Whether the effect is positive or negative depends upon the investments you choose and the performance of those investments.  But it is entirely possible, and perhaps probable, that at some point you could face a situation where you feel the best return on your investment would come from a company that is absolutely contrary to what you believe.  In that case, what do you do?  No one but YOU can answer that question.  You must decide for yourself which is more important – your convictions or your potential financial return.

We at Brimmer Financial believe that in many cases our clients will be well served by selecting professional asset managers whose first responsibility is to seek strong portfolio returns and who offer socially and environmentally responsible securities.  We have studied the offerings of the best-known managers and have selected a group that, in our opinion, are suitable for many if not most of our clients. 

*SOURCES: S&P 500; Dow Jones Industrial Average

Securities offered through National Securities, Member FINRA/SIPC – Financial Planning and Asset Management offered through National Asset Management, Inc. – Life and Health Insurance and Annuities offered through National Insurance Corp.



Tolerate the Turbulence

Look beyond this moment and stay focused on your long-term objectives.

Volatility will always be around on Wall Street, and as you invest for the long term, you must learn to tolerate it. Rocky moments, fortunately, are not the norm.

Since the end of World War II, there have been dozens of Wall Street shocks. Wall Street has seen 56 pullbacks (retreats of 5-9.99%) in the past 73 years; the S&P index dipped 6.9% in this last one. On average, the benchmark fully rebounded from these pullbacks within two months. The S&P has also seen 22 corrections (descents of 10-19.99%) and 12 bear markets (falls of 20% or more) in the post-WWII era.1

Even with all those setbacks, the S&P has grown exponentially larger. During the month World War II ended (September 1945), its closing price hovered around 16. At this writing, it is above 2,750. Those two numbers communicate the value of staying invested for the long run.2

This current bull market has witnessed five corrections, and nearly a sixth (a 9.8% pullback in 2011, a year that also saw a 19.4% correction). It has risen roughly 335% since its beginning even with those stumbles. Investors who stayed in equities through those downturns watched the major indices soar to all-time highs.1

As all this history shows, waiting out the shocks may be highly worthwhile. The alternative is trying to time the market. That can be a fool’s errand.To succeed at market timing, investors have to be right twice, which is a tall order. Instead of selling in response to paper losses, perhaps they should respond to the fear of missing out on great gains during a recovery and hang on through the choppiness.

After all, volatility creates buying opportunities. Shares of quality companies are suddenly available at a discount. Investors effectively pay a lower average cost per share to obtain them.

Bad market days shock us because they are uncommon. If pullbacks or corrections occurred regularly, they would discourage many of us from investing in equities; we would look elsewhere to try and build wealth. A decade ago, in the middle of the terrible 2007-09 bear market, some investors convinced themselves that bad days were becoming the new normal. History proved them wrong.

As you ride out this current outbreak of volatility, keep two things in mind. One, your time horizon. You are investing for goals that may be five, ten, twenty, or thirty years in the future.

One bad market week, month, or year is but a blip on that timeline and is unlikely to have a severe impact on your long-run asset accumulation strategy. Two, remember that there have been more good days on Wall Street than bad ones. The S&P 500 rose in 53.7% of its trading sessions during the years 1950-2017, and it advanced in 68 of the 92 years ending in 2017.3,4

Sudden volatility should not lead you to exit the market. If you react anxiously and move out of equities in response to short-term downturns, you may impede your progress toward your long-term goals. 


Periodically emails change.  If you notice that you haven’t received an email from us recently, we may not have your correct email address.  Please send us a quick email note from your most used email address.  This will allow us to serve you better.

Send a quick note to Sue:

[email protected]


Events that affect the financial markets might affect your investment portfolio.  Rather than have the talking heads on TV explain an event, please allow us the opportunity to further explain events to you with a timely email. 

Those of us at Brimmer Financial have been aware that the news is almost always the BAD NEWS!  Yes.  Bad news happens and bad news sells newspapers.  But it’s not the ONLY news.  Quite often positive forces behind the headlines are at work in the financial markets, but too often good news is ignored and only the negative is featured. 

Many of our clients have heard us explain periodic market swoons as predicable events.  Markets go up.  Markets go down.  BUT – Markets have never stayed down.

So, let’s stay in touch.  We promise not to send you minute-by-minute minutia, day-by-day bits and pieces and weekly worries.  We at Brimmer Financial are long term investors.  We stay in the boat during rough weather and smooth sailing.  History is on the side of the optimists.


Tel:  (508) 240-0320      FAX:  (508) 240-2309    www.brimmerfinancial.com

Securities offered through National Securities Corporation, member FINRA/SIPC.  Advisory services offered through National Asset Management, an SEC registered investment advisor.  Fixed Insurance Products offered through National Insurance Corporation.



Mr. Market is the imaginary investor devised by Columbia University Professor Benjamin Graham and introduced in his 1949 book The Intelligent Investor.  In his book Mr. Market is driven by panic, euphoria and apathy on any given day.  Really, not much has changed since Graham was writing and teaching in the 1930s, 40s, 50s and 60s.  This scholar is considered the founder of Value Investing.  Warren Buffet was one of his students.  Sir John Templeton and numerous other money managers have studied and followed Graham’s teachings over the years.  Benjamin Graham is still considered one of the great thinkers and leaders among investors and their advisors.

Professor Graham earned a scholarship to Columbia University after his family lost most of their money in the Great Panic of 1907.  ‘Panic’ is what they called market crashes in the early years of our public stock market.  After graduation he was offered a job by one of the firms then active on Wall Street.  By the age of 25 he was already earning about $500,000 annually.  In the Stock Market Crash of 1929 Graham lost almost all of his investments.  This painful event taught him some valuable lessons about the investing world.  His observations after the crash inspired him to write a research book with David Dodd, called Security Analysis, which was published in 1934.  It’s still in print, many editions later, and used as a basic text for those who want to learn how to analyze securities.   SOURCE: INVESTOPEDIA

Value Investing, which was Graham’s specialty, is the discipline that seeks to discover companies whose share prices are lower than their intrinsic value.  Sir John Templeton often referred to “replacement book value” as a reference point in valuing a company.  He asked himself and his team what it would cost to replace a given company in today’s dollars.  In other words, to build it from the ground up.  If he were considering a certain company to add to his holdings he would only buy it if he considered it a bargain.  He often said that he would sell a stock if he found “a better bargain.”  Stocks on his short list of possible buys – 1) Had a history of steady earnings growth; 2) Were in an industry that provided goods and services that people needed and wanted; 3) Were run by honorable managers; 4) Had a price to earnings ratio that was low relative to the market.  Templeton also pioneered international investing for Americans in the 1940s and 1950s.  He believed that he had to look all over the globe to find the best bargains.  -SOURCE: THE TEMPLETON PRIZES by WILLIAM PROCTOR, 1983 Doubleday & Co.

Over many decades the popular price to earnings ratio (P/E) metric has been above or below 15 when measuring the Standard and Poor’s 500 largest US stocks. A  Price/Earnings of 15 is the median over many years.  In other words, half the time the S&P 500 has been above 15 times earnings and half the time it was below 15.  For example – If a stock earns $1.00 profit per share per year, and if the market will pay $15.00 per share, its P/E, expressed as a whole number, is 15.  Historically the higher the P/E, the riskier the stock.  And conversely the lower the P/E, the less risky the stock.  Again, P/E is the stock price divided by the earnings per share.        SOURCE:  S&P 500 DATA 1880 TO 2017

During the great DOT.COM Boom of the late 1990s, up to March, 2000, some companies were trading at anywhere from 100 to 200 times what they were earning.  This was a classic BUBBLE.  I managed to avoid most of these excesses, but not all, by staying with mostly large, well-established securities which were not over-priced as were so many high-flying high-tech ideas during those years.  But even the high quality stocks tumbled down the hill with the goofy high tech ideas, junk bonds and companies which never even earned a dime.

Currently there’s one group of investments that’s climbing up the popularity charts – the socially responsible stocks and mutual funds.  This group of investments has proven that it can perform well over time.  Their theme is Doing Well by Doing Good.  They follow disciplines that focus on environmental impact, strong


performance, in-depth research, and active engagement with the management of the companies selected for inclusion in these funds.  These fund managers go beyond shunning tobacco, alcohol, firearms and polluters.  The corporations that embrace environmental, social and governance (ESG) best practices have discovered that it’s good business.  ESG firms seem to have fewer legal problems because they avoid company behaviors that could be faulted.

“Corporations that avoid problems tend to enjoy competitive returns for their shareholders.  ESG investing, which evaluates companies based in part on their environmental, social and governance policies, is a fast-growing segment of the financial landscape.  Importantly, socially-responsible investing is not just a strategy to feel good about how your money is invested.  Many experts argue that an ESG strategy also leads to better returns. SOURCE: FORBES INVESTING #StockWatch Aug 16, 2017

Socially Responsible Investing (SRI) in the United States can be traced back over 200 years to the money management practices of the Methodists.  Their founder, John Wesley, urged his followers to avoid profiting at their neighbors’ expense.  They avoided doing business with those who earned their money through alcohol, tobacco, weapons, or gambling.  We can follow the development of SRI through more recent decades.  The first Earth Day was celebrated in 1970.  Nuclear power became a concern with the Three Mile Island partial meltdown.  The Love Canal chemical dump disaster was uncovered in 1977.  Also, Ralph Nader began working for consumers and against corporations who were engaged in environmental and safety practices that were objectionable.  In the 1980s Socially Responsible Investing was a major force in ending Apartheid in South Africa.  In 1976 Calvert Investments was the first to launch a socially responsible mutual fund that boycotted companies that did business in apartheid-era South Africa.  Individuals and institutions pulled their investment dollars from companies that operated in and profited from doing business in South Africa, eventually helping to force change within the South African government.  Also in the 1980s mutual funds that screened corporations for weapons, tobacco, gambling, nuclear power, pollution and employee welfare were introduced by companies such as Calvert and Domini.


As Socially Responsible Investing grew in popularity during the 1990s, the Domini 400 Social Index, now named the MSCI  KLD 400 Social Index, was established to follow the top 400 US companies with outstanding Environmental, Social, and

Corporate Governance ratings.  The Index screening excludes those companies whose products have negative social or environmental impacts.  Mutual funds which select environmental, social and governance best practice stocks frequently employ from three to five disciplines, often called pillars, to screen candidates for their portfolios.

Socially responsible money managers actively engage with companies that have excellent reputations: Who treat their employees, customers and suppliers honorably; who advance women and minorities at the management and Board of Directors level; who promote clean water and renewable energy; who are working to protect the public from the scourge of opioid abuse and cyber-crime.

Investing in socially/environmentally responsible securities does not mean giving up on investment returns.  A number of SRI mutual funds have earned four and five star ratings from Morningstar.

At Brimmer Financial/National Securities we feel the better informed you are the more responsible your investment choices will be.  Learn how your investments can reflect your values.  Please call our office to set an appointment to discuss how Socially Responsible Investments may become a positive addition to your portfolio.

DISCLOSURES – The views expressed contain certain forward-looking statements. Although they are forecasts, actual results may be meaningfully different. The material represents an assessment of the market and conditions at a particular time and is not a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding any security in particular. The opinions expressed here are the author’s and do not reflect any opinion of National Securities Corporation, member FINRA/SIPC, my Broker/Dealer, or any of its Affiliates. Source material for this letter include quotations from Investopedia; The Templeton Prizes by William Proctor, 1983; S&P 500 data from 1880 to 2017; Forbes Investing #Stock Watch, Aug. 16, 2017; and the Domini 400 Socially Responsible Index, now called MSCI  KLD 400 Social Index.

Securities offered through National Securities, Member FINRA/SIPC – Financial Planning and Asset        Management offered through National Asset Management, Inc. – Life and Health Insurance and Annuities offered through National Insurance Corp.

Fourth Quarter, 2017

My Comments and Opinions  

Before we review the final quarter of 2017, let’s take a look at the recent spate of market volatility, which is likely caused by computerized sell programs, institutional sellers and panicked TRADERS.  Traders are fast-paced ‘in-and-out’ opportunistic profit hunters. In my opinion INVESTORS are different. They take the long view. Investors look for good quality investments and hang on through good times and bad.  Think Warren Buffett. Now as it turns out, this recent course-correction may be quite short-lived. Of course nobody on this side of Eternity knows the future of the markets, the future prices of putty in Egypt, or the population of paramecia in Portugal.  But it is a little easier to guesstimate the movements of asset prices if we know the factors that can influence their price movements. Generally, high inflation, high interest rates and high taxes are a drag on economic activity and stock market performance.  When inflation, interest rates and taxes are lower, stocks tend to do well. High and low are relative measurements. Higher than what? Lower than what? Can we agree that U.S. inflation and interest rates have been relatively low for a number of years?

When I entered the financial services industry in the summer of 1975 the Dow Jones Industrial Average was trading at around 800.  As I’m writing this, the Dow opened today at 25,052. In a little over 40 years the Dow Jones Industrial Average has gained over 24,000 points.  The Dow is only an approximation of the market’s value because it’s built of only 30 big company stocks. And these are not the original 30 stocks.  Over the years certain companies were dropped and others took their place using a complicated formula.

Stock markets can be explained in many ways.  Here’s one: Ecology, which is defined as the scientific analysis and study of interactions among organisms and their environments.  A forest is an environment of large and small plants and animals that interact. A stock market is an environment of large and small stocks [the shares of companies] and the humans who interact with the market.  Just as a mighty Sequoia starts as a seed, massively large companies often start out as small seed companies. The largest trees in the forest can crowd out the smaller plants under their canopy.  Very large companies can absorb smaller companies into themselves. General Motors is such a company. Since its founding in 1908, GM has acquired a number of auto makers. Mighty GM nearly fell down when it was 100 years old during the Recession of 2008.  It was rescued by American, Canadian and Ontarian governments with loans. For a while GM was nicknamed ‘Government Motors.’ Great recessions are like large hurricanes. Even the biggest tree can fall over when the environment turns nasty. Healthy forests have adequate sunlight, rain and nutrition.  They are relatively free of pests. Healthy stock markets thrive when the companies whose stocks are in the market are profitable, when they enjoy a favorable regulatory environment and when these individual stocks enjoy popularity and are bought by investors. During droughts, plagues of disease and pests, and over-harvesting, forests can take a while to recover.  Markets also take time to recover after recessions.

But stock markets differ from forests in that they tend to move in anticipation of what might happen in 6 to 9 months.  They are forward-looking. Forests grow in place. So, if there’s a grim sounding announcement from some agency of government or chest-thumping threats from a foreign entity, stocks, like so many prairie dogs, will scurry off down into their burrows.  When the threat is forgotten (prairie dogs have short memories) they resume foraging for opportunities to feed and prosper. So it is with stocks short term. When the worry du jour never comes to pass, shares return to popularity.  

Long term movements are different.  US stock markets have followed a course from 1929 to present defined by periods of growth and periods of stagnation.  From 1929 to 1944 markets were often stagnant. From 1944 to about 1968 markets grew nicely. From ’68 to ’82 the markets didn’t go up a whole lot.  Then in 1982 the markets took off (I remember it well) until about the year 2000. After 2000 there were 9 more flattish years until 2009. Since ’09 the markets have been moving up.  All along these long-term trends markets formed smaller zig-zag patterns, moving up and then down and back up almost every 5 or 6 years. So, even during up-trending times the markets did their dipsy-doodle dance.  The famous Ibbottson chart of stocks, bonds, bills and inflation illustrates this data in detail from 1926 to present. Source: Morningstar.

Today many companies are growing, hiring more workers and paying bonuses based on the recent Tax Law enacted by Congress and signed by the President.  Money that had been parked off-shore is returning to America to take advantage of a one-time tax break for companies that repatriate their foreign- held profits.  On January 2, 2018, the Dow Jones Industrials closed at 24,824. On January 26, 2018, the Dow closed at 26,616, up 1,792 Dow points. On March 5, 2018, it closed at 24,824, exactly where it started on the first day of January this year.  The short round trip amounted to about a 7% swing during the first two months of 2018. 1,792 points looks gigantic, but it isn’t relative to the Dow’s current point status. This is called Volatility. It’s not always fun.


STOCKS    The Dow Jones began 2017 at 19,881, and closed on Dec. 29th at 24,719.  This was a gain of 4,838 Dow points, or about 24 percent.  2017 was an unusual year because we don’t often experience a 20% or more gain in any year.  You could make the argument that the DOW was catching up on its poor prior performance from September of 2008 through January of 2013.  

‘The market will do everything it has to do to confuse the greatest number of people.’ – Source: something I heard once.  I think this is an honest assessment of market behavior.  

And if this wraith-like movement of the market is so unpredictable, why do we try to predict its future?  Perhaps because people are uncomfortable with the unknown. We humans take comfort in the dependable, the regular and the stable.  But life is not so dependable, predictable or stable, including the prices of just about everything.

‘Economists were invented to make Weathermen look good.  – An old Wall Street saw.

    “The professionalization of economics, reflected in academia, has been described as the main change in economics since around 1900.  Economists debate the path they believe their profession should take. It is, primarily, a debate between a scholastic orientation, focused on mathematical techniques, and a public discourse orientation, which is more focused on communicating to lay people pertinent economic principles as they relate to public policy.  Surveys among economists indicate a preference for a shift toward the latter.” Source: Investopedia.

In economics, a Goldilocks Economy sustains moderate economic growth and low inflation, which allows a market-friendly monetary policy.  Not too hot. Not too cold.  But just right.

THE FED   Very recently the Chairmanship of our Federal Reserve Bank changed hands.  Replacing Janet Yellen is Jerome H. Powell, an attorney who briefly served as Under Secretary of the Treasury for Domestic Finance under President George H. W. Bush in 1992.  More recently, he was a visiting scholar at the Bipartisan Policy Center from 2010 to 2012.  He has served as a member of the Federal Reserve Board of Governors since 2012.  Source: Wikipedia.  

REBALANCING YOUR PORTFOLIO is the process of reviewing your personal financial goals, current circumstances, and adjusting your investments to reflect your needs and goals.  It’s always a question of your risk/reward suitability. Do you feel more comfortable taking higher risks or more comfortable taking less risk? Do you need more or less income now?  Will you need more or less income later, say at retirement? Draw a triangle. At each point of the triangle write one of these investment characteristics: SAFETY; INCOME; GROWTH. All three of these are mutually exclusive.  We can’t maximize any one of these features without minimizing the other two. This is one of the primary reasons financial advisors recommend some of each in client portfolios. For those who want more income, income is increased.  If you want more growth, the growth component of your portfolio is increased. In many cases younger clients want to stress growth and older clients like more income.

Would you like to review how well diversified your investments are right now?  Has anything important changed in your life? Would you like to begin preparing an estate plan for your family?    Do you have financial questions that need answering? I’ve been a Certified Financial Planner™ professional since 1982.  I’m here to help you.


Sue, and I are both fiduciaries.  As Investment Advisor Representatives (IAR) with National Asset Management, Inc., Sue and I are held to a higher professional and ethical standard than salespeople who are not fiduciaries.  Our primary obligation is to our clients. We must hold your interests higher than our own at all times. Not only is this the moral and ethical requirement for our profession, it’s the law.  Fiduciaries cannot guarantee investment results, but are required to act in the client’s best interests. CFPs, CPAs, attorneys and trust officers are fiduciaries.

SOCIALLY AND ENVIRONMENTALLY RESPONSIBLE INVESTING  is at the heart of good stewardship.  More investment firms are embracing the principles of responsible investing.  Behind this movement is the belief that being a good citizen is the corporate equivalent of doing well by doing good.  Responsible investors avoid companies that pollute, or are human rights violators and/or display unethical management. Responsible investors look for companies who embrace environmental sustainability and resource efficiency.  Companies who practice respect for human rights, diversity and the health and wellbeing of their employees and customers are candidates for these asset managers. Also, accountable governance and transparency which supports all aspects of responsible investing is the hallmark of good citizen companies.


Brimmer Financial will be holding various meetings during 2018 to discuss the features and benefits of RESPONSIBLE SUSTAINABLE INVESTING.  The first meeting will be held at the Provincetown Inn on Thursday, May 10th.  We’ll have a meeting at Noon with a buffet lunch.  We’ll repeat this meeting at 3 PM with refreshments – same place, same date.  If you would like to attend, please call our office at 508-240-0320 so we can reserve your place.

DISCLOSURES – The views expressed contain certain forward-looking statements.  Although they are forecasts, actual results may be meaningfully different.  The material represents an assessment of the market and conditions at a particular time and is not a guarantee of future results.  This information should not be relied upon by the reader as research or investment advice regarding any security in particular. The opinions expressed here are the author’s and do not reflect any opinion of National Securities Corporation, member FINRA/SIPC, my Broker/Dealer, or any of its Affiliates.  

Securities offered through National Securities Corp., Member FINRA/SIPC – Financial Planning and Asset Management offered through National Asset Management, Inc. – Life and Health Insurance and Annuities offered through National Insurance Corp.




“The US Economy grew by 3% in the Second Quarter, the best performance in two years. The current recovery has entered its ninth year — long by economic standards — but it is showing some unexpected vigor. The Commerce Department said on Wednesday that the economy had expanded at an annual rate of 3 percent in the second quarter of the year, better than initially estimated, and a substantial acceleration over the first quarter’s lackluster 1.2 percent pace. The revised figure is still well below President Trump’s goal of 4 percent growth, but it is the economy’s best quarterly showing in two years.” – New York Times, Nelson D. Schwartz, August 30, 2017.

The total effect on the U.S. economy due to this year’s natural disasters won’t be known for some time. In early October, 2017, estimates as high as $200 Billion have been discussed in the media. On the loss column is the amount of money the insurance industry and government will be distributing to those who have suffered losses. On an information website called Vox, I found these statements: “In 2010, 123.3 million Americans lived in coastal counties, about 39 percent of the population. By 2020, another 10 million will be catching sea breezes. A lot of people want to live near the water,” said David Samuhel, a senior meteorologist at AccuWeather.”

There are six unemployment measurements used by the U.S. Department of Labor Statistics, U-1 through U-6. U-1 counts persons unemployed 15 weeks or longer, as a percent of the civilian labor force. In August U-1 was 1.8%. U-3 is total unemployed, as a percent of the civilian labor force. This is the official government unemployment rate. In August U-3 was 5%. U-6 is total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force. In August U-6 was 9.7%. The total U.S. workforce at the end of the Second Quarter was about 15,500,000 unemployed or partially employed. U-2 and U-5 measure intermediate statistics.

– NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for part-time employment. Updated population controls are introduced annually with the
release of January data. Source: US Department of Labor Statistics

INFLATION – We usually think of consumer prices when discussing inflation. Most commentators tie price inflation to interest rate increases. One of the primary forces that drive up both interest rates and the cost of living is the amount of money in circulation. Prices of things and services move up and down based on “market forces.” If most of the people have very little money, they are unwilling and unable to purchase goods and services. When this occurs, the prices of the goods and services drop to meet market demand. When most of the people have more money than they need for the basics, market forces drive up prices to the level that the market will support. During times of recession, prices drop. During times of inflation, prices rise. Right now we have what could be called a Goldilocks Economy. Our economy is not growing too fast nor too slow. Prices of most goods and services are somewhat stable. A few notable exceptions
to the stable price category are the costs associated with secondary education ~ colleges and universities. Another is medical care – hospitalization, drugs and professional services. The supply of oil is a determinant of inflation. When there’s a surplus of oil, prices stay low or even drop. A shortage, as happened during the 1973 Organization of Petroleum Exporting Countries’ oil embargo, can drive prices of oil much higher. Back in the 1970s the term “peak oil” was bandied about. The message was that there would be a point of maximum extraction followed by a time of diminishing returns. Since the early part of the 20th Century various predictions of our ‘running out of oil’ have been circulated. These forecasts were based on the belief that there was not much more oil to be found and that within a short number of years the supply of crude oil would be spent. Well, not yet as it turns out. Trillions of barrels of oil locked up in shale have been made available through new technologies including a technique called fracturing or fracking, the environmentally controversial method of cracking open fissures in deep layers of rock, has released a great quantity of oil in recent years.

”A 2016 conservative estimate set tiie total world resources of oil shale equivalent to yield of 6.05 trillion barrels (962 billion cubic meters) of shale oil, with the largest resource deposits in the United States accounting more than 80% of the world total resource. For comparison, at the same time the world’s proven oil reserves are estimated to be 1.6976 trillion barrels (269.90 billion cubic meters).” Source: Wikipedia.

Another notable example of inflation is the price increase of common stocks over the past 8 years.

Longest Recovery Ever – First Trust Portfolios, L.P.
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 10/9/2017
“If the current economic expansion lasts another year and a half, it’ll be the longest on record, even surpassing the expansion of the 1990s that ended in early 2001. Notice how we didn’t say it’ll be the “best” expansion of all-time, just the longest; it’s not the best by a long shot. From the recession bottom to the expansion peak, real GDP expanded 39% in the 1980s and 43% in the 1990s. So far, eight years in, this one is only up 19%. That’s why we’ve been calling it the Plow Horse Economy.

“Still, the length of the current expansion is pretty remarkable given how doubtful most were that it would even get started back in 2009, as well as all the predictions since then that it would end in spectacular fashion during the past eight years.

“And we think the odds of going at least another 18 months are very high. Nowhere do we see the kinds of policy shifts or imbalances that could curtail economic growth enough to throw us back in recession.

“In terms of policies, tight monetary policy, a major shift toward protectionism, or large tax hikes could all hurt growth. In the past, tight money has usually been the key factor behind recessions. But, for now, short-term interest rates are about 125 basis points below the yield on the 10-year Treasury, roughly 200 basis points below the growth trend in nominal GDP (real GDP growth plus inflation), and the banking system remains stuffed with excess reserves. Yes, President Trump has talked tough on some trade issues, but has yet to follow through in any major way compared to previous presidents. Meanwhile, geopolitical issues regarding North Korea may limit his ability to antagonize China with the sort of protectionist policies he suggested during the presidential campaign. As far as tax hikes go, recent tax proposals would cut key marginal tax rates, not raise them. In other words, public policy isn’t going to be the source of recession anytime soon.

“Meanwhile, home builders haven’t overbuilt, consumer financial obligations are still hovering near the lowest share of income since the early 1980s, and bank capital ratios are substantially higher than before the financial crisis. Moreover, market-to-market accounting rules were tamed so that there’s less likely to be a sudden drop in monetary velocity. Will there be another recession? Certainly! It’s just very unlikely to start any time before spring 2019, which means the current expansion looks set to become the longest on record. And if Congress and the President get their acts together and find a way to pass tax cuts or tax reform (or both!), that should postpone the next recession even further into the future. Just another reason why equity investors have good reason to remain bullish.”

This information contains forward-looking statements about various economic trends and strategies. You are cautioned that such forward-lool(ing statements are subject to significant business, economic and competitive uncertainties and actual results could be materially different. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time and are the opinion of the individual strategist. Data comes from the following sources: Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, the Federal Reserve Board, and Haver Analytics. Data is taken from sources generally believed to be reliable but no guarantee is given to its accuracy.

We’re now in the 8th year of this Bull Market. The average Bull Market lasts about 5 years. Does this mean we’re overdue for a big sell-off soon? I don’t think so. A few gyrations are always expected. We haven’t yet seen Alan Greenspan’s “irrational exuberance,” a term he used during the 1990’s Dot.Com Bubble. Most markets, stocks, real estate, commodities, collectables, etc. go in a zig-zag pattern with a long-term upward bias. No one can predict the near future of any market. Every five or six years we experience a down market when investors take profits, the news is temporarily bad, or for any number of other reasons. After the market swoons, smelling salts in the form of better economic news, bargain hunting investors, etc., eventually gets the market up off its fainting couch.

Money goes where it’s best treated. We usually think of money as currency, such as Dollars, Yen, Euros, etc. But currency is only worth something if it can be turned into purchasing power. The value of money is its purchasing power. At 3% compound inflation, the purchasing power of money shrinks by about half in 25 years. Any time a country undergoes Hyper-Inflation (Germany after World One, Hungary in 1946, Zimbabwe from 2007 -2009), the purchasing power of each unit of currency spirals down until the proverbial ‘wheel barrel of paper money is needed to buy a loaf of bread’. Source: investopedia.

We must have money to function in a modern society. Money is obtained by trading labor for money, by selling things for money, by collecting income from our savings, by receiving dividends from our investments, by collecting insurance proceeds after a loss, by receiving retirement income from our pensions and/or Social Security. In all cases money has value only to the degree it can provide us with needed and wanted goods and services. The many trillions of US Dollars floating around the economies of the world are always looking for a happy home…where taxes are not onerous, where regulations arereasonable and where market forces reward capital investment.

By changing our thinking from “how much” money we have, I suggest thinking about “how much purchasing power” our money has. One of my first classes in financial services was a simple example of a person at three stages of life: 1) Learning; 2) Earning; 3) Yearning. The Yearning person did not make adequate preparation for the future during the Earning phase of life. We were taught to help people save, invest and insure so that they would not be yearning for the good old days once they retired. Fortunately, many of our citizens have been paying attention and have achieved a degree of financial security for themselves and their families. But not enough.

“if the present Congress errs in too much talkng, how can it be otherwise in a body to which the people send lawyers, whose trade it is to question everything^ yield nothing, talk by the

With apologies to all the diligent members of the Bar, I only want to point out that many of those we send to Congress hold Law Degrees. Fifty Senators and about 167 U.S. Representatives in the 115^^ Congress are lawyers. Law students are trained to debate effectively. When our nation established the Constitution, the U.S. House of Representatives was to be filled with those who would speak for their neighbors. This was to give communities a voice in the central government. The House is where most bills (laws) begin. After consideration by the House, a bill may be voted on or put aside for future consideration (tabled). The Senate, whose august members are supposed to be the wisest and most thoughtful, deliberate the merits of bills brought to them.

Senators have a longer term of office, 6 years, vs. 2 years for each Representative. If we wonder why “nothing is getting done,” it may be because our country is divided on many issues. Unless a bill passes both houses of Congress by an acceptable majority, it will never reach the President’s desk for final signature.

This may account for so many Executive Orders signed by Presidents over the past several decades and why many laws have been interpreted “from the Bench,” meaning that judges have been creating law by judicial edict, a way to by-pass Congress and the Executive Branch in order to create a new interpretation of an existing law. Only the Supreme Court can make a final determination as to the constitutionality of any law.

How does the political pot-stirring in DC. affect our investments right now? Congress has a reputation of playing brinksmanship… delaying action until forced by external forces greater than their intransigence. Our recent national election reflects the basic divisions of opinion in America today. As long as the political pot is being stirred on low heat we should not expect any rapid changes. If the heat is turned up and the pot begins to boil over then we might see something not of the norm.

DISCLOSURES – The views expressed contain certain forward-looking statements. Although they are forecasts, actual results may be meaningfully different. The material represents an assessment of the market and conditions at a particular time and is not a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding any security in particular. The opinions expressed here are the author’s and do not reflect any opinion of National Securities Corporation, member FINRA/SIPC, my Broker/Dealer, or any of its Affiliates.

Source material for this letter include quotations from Wikipedia, The New York Times, Vox, an information website, Brian Wesbury, First Trust Portfolios, U.S. Department of Labor Statistics, Investopedia and Thomas Jefferson.


Securities offered through National Securities, Member FINRA/SIPC – Financia l Planning and Asset Management offered through National Asset Management, Inc. – Life and Health Insurance and Annuities offered through National Insuranc e Corp.



My Comments and Opinions

IF is a very big word.  It’s the biggest word in History.  ‘IF this had happened, then that would not have happened’ is the twist in every story, in every event and for every life on Earth.  ‘IF’ doesn’t have to be happenstance.  ‘IF’ can be planned.  IF we do this correctly, then that result may be desirable.  IF Edison hadn’t persisted with his electric light experiments, surely someone else would have discovered tungsten and caused it to glow in a partial vacuum when electricity was applied.  But Edison didn’t give up.  When asked about it, Edison allegedly said, “I have not failed 1,000 times.  I have successfully discovered 1,000 ways to NOT make a light bulb.”  Edison’s ‘IF’ worked.

IF the U.S. Economy continues to grow slowly, as it has recently, then we will have to wait a while to enjoy a 3% or 4% annual growth rate.  “Understood in its broadest sense, the economy is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of resources.” – source:  Wikipedia.org.

The First Quarter, 2017, gave us an economic growth rate of only 0.7%.  Puny.  The U.S. needs to grow the economy by 3% to 4% per year to generate many more sales, higher profits and fuller employment.  In my Fourth Quarter, 2016, Newsletter I mentioned the book The 4% Solution: Unleashing the Economic Growth America Needs.  This is a good source book for those interested in the “what’s and how’s” of economic growth.  In nature and in human economic life, what doesn’t grow stagnates or dies.  We need growth.

I found a good website about the history of the U.S. economy from 1930 to 2016.  In 48 years out of a total of 86, our economy grew more than 3%.  Take a look at this website: https://www.thebalance.com/us-gdp-by-year by Kimberly Amadeo, updated April 19, 2017.  When an economy grows at a faster pace, profits tend to increase, prosperity flows to more people, and tax revenues increase because the number of taxable events increases.  State and federal governments collect more money.  History has demonstrated that when tax rates go down, tax revenues increase.  (This might seem counterintuitive.)  Budget deficits can actually decrease IF politicians apply the increased tax revenue to the deficits.

IF taxes go down and IF the average American family were to receive an extra $4,000, for example, in annual tax savings, the average family should be happy.  They could spend some of the $4,000, save some of it and maybe invest some of it.  Now imagine that each of the 10 million millionaires in America (NBC News, March 10, 2015 “More Millionaires Than Ever Are Living in the U.S.”) gets a tax reduction of maybe $20,000 per year.  They could also spend, save or invest this money.  NOTE: A net worth of one million is not the same as an income of one million.  The answer to the question “How many Americans earn one million dollars a year?” is roughly 500,000, but that number changes a bit year to year.  See: https://www.quora.com/How-many-people-make-more-than-a-million-dollars-per-year.  

Now IF the many thousands of corporations large and small get a tax reduction, they could save for periods of slow economic growth and/or spend and invest in new machinery, plant and personnel.  That amount could be enormous.  Billions.  But what about the concern that these wealthy people and corporations don’t pay “their fair share?”  In my opinion a top federal corporate tax rate of 35% is NOT FAIR.  It is onerous.  Fact – corporations don’t pay taxes.  They collect taxes from their customers and pass them through to the governments.  So it’s We the People who really pay the taxes.  One of the first rules of Economics, the study that Thomas Carlyle called “The Dismal Science”, is this: You get more of whatever you subsidize and less of whatever you tax.  The more you tax something or someone, the more inclined that something or someone is to move to a lower tax location or cease earning so much.  The more you subsidize something or someone, the more inclined they will be to seek free money.  People are opportunistic.  Doubt me?  Follow the daily news.

Interest RatesWealthvest of Bozeman, MT, recently produced a chart of interest rates from the Sumerians, 5,000 years ago to modern times.  From 3,000 to 2,000 B.C. the Sumerians charged roughly a 33% annual tax for barley and 20% per year for silver.  They taxed production.  Babylon’s Code of Hammurabi lowered interest rates to 10% about 1,900 B.C.  The Greek financial systems were well developed by 300 B.C.  Their interest rates were in the 6% to 8% range.  In 500 A.D. the Byzantine Emperor Justinian set interest rates in a range not to exceed 4% to 8% based on the credit quality of the borrower.  In 1694 The Bank of England began lending at 6%.  The last great spike in American interest rates occurred around 1982 when home mortgages hit 18%.  So, for the past 5,000 years interest rates have trended down with the exception of the inflation of the early 1980s here in America.  But other countries have also suffered hyper-inflation during recent years, much of it due to governmental mismanagement.  Among them: Argentina, Brazil, Bulgaria, Mexico, Russia, Turkey and Zimbabwe.  Source: http://www.munknee.com/21-countries-have-experienced-hyperinflation-in-last-25-years.

High inflation rates and high interest rates go hand-in-hand.  Following the Financial Panic of 1907, Congress established the U.S. Federal Reserve System (the Fed) in December, 1913.  The Fed is charged with three important functions: 1) Maximize employment; 2) Stabilize prices [inflation]; 3) Moderate [manage] long-term interest rates. These three mandates are each 1/3 of the same economic pie.  When employment is healthy, but not over-heated, interest rates and inflation tend to be lower.  IF there is a bidding war for good employees, wages are pushed up and inflation and interest rates tend to rise.  When we are in a recession and unemployment is


high, interest rates and inflation tend to go down.  We have also had periods of deflation in our history, meaning negative inflation.  IF we could predict market behavior for any market, real estate, gold, stocks – whatever, we would all live on our own private tropical islands.  But we can’t predict much of anything, even the weather, for more than a few days out.  Because we can’t predict the future movement of asset classes we’re driven to study past markets for some hints.  That said, always remember that Past Performance is No Guarantee of Future Results.  

There are any number of charts available for investors today.  The most important to me is the chart Stocks, Bonds, Bills and Inflation- 1926 to Present, annually produced by Morningstar, Inc.  I’ll summarize with broad brush strokes the history of good stock markets and down or flat markets in America since the 1929 Stock Market Crash.  The high for the Dow Jones Industrial Average in 1929 was 380.  It took 25 years for the Dow to return to its 1929 high in 1954.  The Post-World War II Bull Market started in 1954 and ended in 1966.  It lasted twelve years and increased from 401 in December, 1954 to 891 on January 5, 1966.  That bull market lasted about 11 years.  From 1966 to 1982 the Dow floated in a range from 600 to 1,000 – 16 years of doodling.  Then on August 12, 1982, the Dow experienced its most spectacular rise in history.  I remember it well. From 777 on August 12, 1982, the index grew more than 1,500% to close at 11,722.98 by January 14, 2000, without any major reversals except for a brief but severe downturn in 1987, which was the largest daily percentage loss in Dow history, a one-day drop of 22%.  That bull market lasted 18 years.  There were two bear markets and two bull markets between 2000 and 2010.  The first bear was the Dot.Com Mania Crash, 2000 to 2003, a drop of about 40%.  It was followed by a bull market from 2003 to 2007.  The most recent bear market followed the Financial Crisis of 2008.  On September 16, 2008, failures of large financial institutions in the United States, due primarily to exposure to packaged subprime loans and credit default swaps issued to insure these loans and their issuers, rapidly devolved into a global crisis.  This resulted in a number of bank failures in Europe and sharp reductions in the value of stocks and commodities worldwide.  During the Financial Crisis Bear Market the Dow dropped by 54% before resuming its upward movement.  From 2000 to 2010 the market basically went up, down, up, down and back up, going practically nowhere.  Then from 2010 to March 31, 2017, the Dow Jones Industrial Average moved up. The Dow Jones started 2000 at 11,497.  It closed at 20,663 at the end of March, 2017.

Over the past 88 years the Dow has zigged and zagged its way up from 380 to 20,663.  Here’s the large pattern: 1929-1954 was FLAT; 1954 to 1966 was UP; 1966 to 1982 was FLAT; 1982 to 2000 went UP bigly [real word] even with the bad 1987 crash and quick rebound; 2000 to 2010 was FLAT; 2010 to Present seems to be MOVIN’ ON UP.  Since 1929 we had 25 FLAT years, then 11 UP years, then 16 FLAT years, then 18 UP years, followed by 10 FLAT years, and since 2010, it’s been going mostly UP.    IF, IF, IF the American stock market follows the undulations of the past 88 years, there’s a good chance that we will continue to witness a growing stock market for a few more years.  NOTE: the preceding was a peek at some technical analysis.  Fundamental analysis of stocks includes such things as earnings, prices compared to earnings, rates of growth of the


companies, dividends, competitive advantages or disadvantages and many other factors.  IF America continues on a growth path, investors will likely anticipate good news 6 to 9 months out and buy more shares.  The stock market looks ahead.  Investors try to get in front of a positive trend.   Again – PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.  From the first trading day of 2017 to the end of March, 2017 the Dow Jones Industrial Average increased from 19,881 to 20,728, up 847 Dow points.

Regardless of where the economy, or the markets, or interest rates or the prices of putty in Egypt go over the next few years, one thing seems certain to me…we will need more money over time.  At Brimmer Financial/National Securities we practice the art and science of financial planning.  Financial planning is not an exact science nor is it Rembrandt.  It’s the process of doing what we can to be sure – come what may, good or ill – that you will have most of your financial needs covered.  If you live a long time, will you have enough income?  If your lifetime is less than average, will your heirs be protected?  If you become incapacitated, will you have adequate replacement income?  Many celebrities have died without making a will and many young professional athletes go bankrupt a few years after they retire from the game.  They didn’t plan.  They needed someone to guide them so that they would be able to retain much of their earnings for life and for their heirs.  It would be great if people who worked so hard for their earnings could keep a chunk of their money and then pass it along.  IF we all had written financial plans I believe we would have many, many fewer financial failures.  Having a financial plan doesn’t guarantee financial success, but it does help point us in a direction that has helped so many over the years.  Businesses make plans.  We the People also need to plan.

IF you don’t have a financial plan, call us.  508-240-0320. IF we don’t have your email address, call us.  You’ll know because you don’t get our emails. IF you have questions about planning, investments, insurance or annuities, call us.  IF you have assets in old retirement plans and would like to bring all your assets together, call us.  IF you are still of working age and are not adding to your investment portfolio, call us.

“You can lead a horse to water, but a pencil must be lead.” – Laurel and Hardy

DISCLOSURES – The views expressed contain certain forward-looking statements. Although they are forecasts, actual results may be meaningfully different. The material represents an assessment of the market and conditions at a particular time and is not a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding any security in particular. The opinions expressed here are the author’s and do not reflect any opinion of National Securities Corporation, member FINRA/SIPC, my Broker/Dealer, or any of its Affiliates. Source material for this letter include quotations from Wikipedia; The 4% Solution: Unleashing the Economic Growth America Needs; www.thebalance.com by Kimberly Amadeo; https://www.quora.com/How-many-people-make-more-than-a-million-dollars-per-year; www.munknee.com/21-countries-have-experienced-hyperinflation-in-last-25-years; Stocks, Bonds, Bills and Inflation 1926-Present – Morningstar; Dow Jones Industrial Average; Robert W. Brimmer, CFP®; Laurel and Hardy.

4           Securities offered through National Securities, Member FINRA/SIPC – Financial Planning and Asset        Management offered through National Asset Management, Inc. – Life and Health Insurance and Annuities offered through National Insurance Corp.

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Fourth Quarter, 2016
My Comments and Opinions

Markets go up. Markets go down. Up is better.

Up has been the trajectory of the equity markets in America since the November elections. Why? Perhaps it’s because there’s been a surge of optimism among investors. They seem to be anticipating more jobs in our country, lower taxes, and an improving business environment. Investors and business owners like what they’re hearing. The message that our new president has been trumpeting is encouraging shareholders to add to their portfolios. But it’s not all candy and roses. Chief among our concerns is what to do about our National Debt, now $20,000,000,000,000. If the population of the United States is, say, 325,000,000, then each child, woman and man in America “owes” about $61,000 to ourselves and to our other creditors. To ourselves, because millions of us own U.S. Treasury Securities. To others, because companies and countries the world over also own our debt. We’re not the only country with national debt. In fact, there are only five nations on earth without any debt – Macao, British Virgin Islands, Brunei, Liechtenstein and Palau. Source: http://www.therichest.com/rich-list/rich-countries/the-only-5-countries-in-the-world-living-debt-free/.

Americans are clearly divided. Secretary Clinton received a majority of the popular vote, but our Electoral College brought Mr. Trump to the White House. When the Founders designed our Constitution they worried that the more populous states would have a disproportionate influence on the elections. The result of their deliberations is our Electoral College.

“The Electoral College is a process, not a place. The founders established it in the Constitution as a compromise between election of the President by a vote in Congress and election of the President by a popular vote of qualified citizens. The Electoral College consists of 538 electors. A majority of 270 electoral votes is required to elect the President. Your state’s entitled allotment of electors equals the number of members in its Congressional delegation: One for each member in the House of Representatives plus two for your Senators. Most states have a “winner-take-all” system that awards all electors to the winning presidential candidate. However, Maine and Nebraska each have a variation of proportional representation.”

America’s body politic
has been divided since political parties first appeared in our earliest years. Our first Commander-in-Chief, George Washington, was never a member of any political party. In fact, he disdained them. But by the time John Adams became our second president, political parties were furiously attacking each other. The election of 1800 was particularly nasty. Here’s a short version of the story. After the initial votes were tallied, Thomas Jefferson and Aaron Burr remained in a tie which threw the election into the House of Representatives. It took 36 ballots over eleven days to determine the victor. After the wheeling and dealing was over, Thomas Jefferson became our third president by two votes when Maryland and Vermont switched sides. Source: John Ferling- smithsonian.com November 1, 2004. Every four years we, the ‘shareholders’ of the United States of America, get to elect our Chief Executive Officer. Many of our former CEOs were lawyers. Our newest one is a business person.

Money is not so much currency, e.g., the Dollar, Yen or Euro, as it is purchasing power. Money is apolitical. The purchasing power of our money doesn’t care who the president is or who is in which political party. Money is also socially agnostic. Money has no interest in who has more of it or less or it. Money can’t think. It’s just a medium of exchange. Money exists because it’s better than bartering for what we need.

Political winds can blow the economy hot or cold. Warm political air, i.e., lower taxes, fewer regulations, etc., makes it easier for businesses to form and for commerce to increase. High tax rates and onerous regulations have a cooling effect on the economy. There is, of course, no “just right” temperature for any economy. Instead, we’re always moving in and out of the thermoclines in this ocean of activity which is our economy.

Tax policy is the favorite football of politicians. From the April 15, 2016 edition of the Washington Examiner here’s a quote from an article by Jason Russell: “As they rush to file their taxes by April 18, 2016, Americans are rightfully frustrated with the complexity of the 74,608-page-long federal tax code. The federal tax code is 187 times longer than it was a century ago, according to Wolters Kluwer, CCH, which has analyzed it since 1913. Amazingly, in the first 26 years of the federal income tax, the tax code only grew from 400 to 504 pages. Even through President Franklin Roosevelt’s New Deal, the tax code was well under 1,000 pages. Changes during World War II made the length of the tax code balloon to 8,200 pages. Most of the growth in the tax code came in the past 30 years, growing from 26,300 pages in 1984 to nearly three times that length today. This growth in the tax code has not come without consequences. ‘Over the decades, lawmakers have increasingly asked the tax code to direct all manner of social and economic objectives, such as encouraging people to buy hybrid vehicles, turn corn into gasoline, purchase health insurance, buy a home, replace that home’s windows, adopt children, put them in daycare, purchase school supplies, go to college, invest in historic buildings, spend more on research, and the list goes on.’ according to the Tax Foundation’s chart book, Putting a Face on America’s Tax Returns.”

Presidents Kennedy, Reagan and Clinton helped lower many tax rates which resulted in economic growth rates that persisted for several years after each reform. Every Dollar you don’t give to the tax collector frees up a Dollar that can go into the economy. This means when we have more money in our wallets we can spend more. Each time we make a purchase there are taxes to pay: Sales taxes to the states and income taxes from the companies and their employees to the Federal coffers. Also, lower capital gains taxes encourage more sales of appreciated assets. Reducing tax rates is a win-win proposition. Tax payers have more money to spend. Government tax collections actually increase, as counter-intuitive as that may seem. Most states must balance their budgets. The Federal Government does not have to balance the national budget, thus the growing deficits and the debt.

America’s economy has been growing at a fairly anemic 1% to 2% rate annually. Some economists have suggested that we should try to increase our growth rate to 4%. A book published in 2012 called The 4% Solution: Unleashing the Economic Growth America Needs, contains essays by academics and business
people, five of whom are Nobel Prize-winning economists: Robert Lucas, Gary Becker, Edward Prescott, Vernon Smith and Myron Scholes. According to a review published in The New York Times, “The ideas in the book include lowering corporate tax rates, shifting away from taxing income to taxing consumption and property, promoting innovation by letting professors keep gains from their research, expanding free-trade pacts with Japan and other countries, refocusing immigration policy to recruit more high-skill workers, and expanding the work force by lowering payroll taxes on employees with children.” These essayists go into the reasons they believe a 4% growth rate would produce the greatest good for the greatest number of us by increasing the velocity of money. Velocity measures the number of transactions per unit of time.

While we’re on taxes, it’s that time of year again. Investors who own stocks, mutual funds and partnerships should wait a few weeks before filing their final tax returns because corporations sometimes discover accounting errors which causes them to send out CORRECTED 1099 forms. If you wait a while you may save yourself the cost of having to re-file your income taxes. If you prepare your own taxes I recommend that you meet with a CPA or Enrolled Agent every three years just to be sure you haven’t missed anything important. We tell our clients to keep their investment and bank statements in files chronologically by month. With most mutual fund statements, retaining the year-end statement is usually enough. If you need specific information about gains or losses in your taxable accounts, they are usually readily available on your mutual fund annual summary and 1099 forms. Or just call us at 508-240-0320.

10 common tax-filing mistakes to avoid By Kay [email protected]. Read more: http://www.bankrate.com/finance/taxes/10-common-tax-filing-mistakes-to-avoid-

1-Math miscalculations – The most common error on tax returns, year after year, is bad math. Mistakes in arithmetic or in transferring figures from one schedule to another will get you an immediate correction notice. Math mistakes also can reduce your tax refund or result in you owing more than you thought.

2-Computation errors – These are cousins to the standard math mistakes. In these computation cases, taxpayers or their tax pros make mistakes in figuring such tax-return entries as taxable income, withholding and estimated tax payments.

3-Misspelled or different name – The IRS is all about numbers, but words – specifically names – are important, too. When the names of a taxpayer, his or her spouse or their children don’t match the tax identification number that the Social Security Administration, or SSA, has on record, that difference will cause the IRS to kick out or slow down processing of the tax return.

4-Direct deposit dangers – Taxpayers can have a refund directly deposited into multiple bank
accounts. This option is a great way to save your refund money, but the more numbers you enter on a tax form, the more chances you have to enter them incorrectly. And a wrong account or routing number could cause you to lose your refund entirely.

5-Additional income, additional filing work – Did you have a side job this year? If so, as a contractor you probably received a Form 1099-MISC detailing the extra earnings. What about savings and investment accounts? For these, you should have received Form 1099-INT and Form 1099-DIV statements.

6-Filing status errors – Make sure you choose the correct filing status for your situation. You have five options, and each could make a difference in your ultimate tax bill. If this is the first tax-filing season since your divorce and you now are a single parent, writing “head of household” probably will be more beneficial. And what if you’re still married, but you and your spouse are thinking about filing separate tax returns? That works in some cases, but not all.

7-Social Security number oversights – Because the IRS has stopped putting taxpayer Social Security numbers on tax package labels in response to privacy concerns, some taxpayers forget to write in their identification numbers. Your tax ID number is crucial because there are so many transactions – income statements, savings account interest and retirement plan contributions – keyed to this number.

8-Complete charitable contributions – Do you give to charitable groups? All types of donations, from cash to cars, could be valuable tax deductions, so make sure you count them all when you file. Be sure to follow the donation tax rules, the most important being that you give to a qualified organization – that is, one that has tax-exempt status with the IRS. Also be careful when calculating any gifts of clothing and household items. Tax law now requires that these donations be in good or better condition or the deduction is disallowed. And remember that the amount you can claim for donated goods is the fair market value of the items; that’s what a willing buyer would pay for it in its current condition, not what you paid for it.

9. Signature required – Sign and date your return. The IRS won’t process it if it’s missing a John Hancock, and that means on e-filed returns, too. Taxpayers filing electronically must sign the return electronically using a personal identification number, or PIN. To verify your identity, you’ll have to provide the PIN you used last year or your adjusted gross income from your previous year’s tax return.

10 – Missing the deadline – Millions of taxpayers put off filing until the very last minute. That’s OK as long as your mailed paper return is postmarked by the April filing deadline or you hit “enter” to e-file your 1040 by midnight of the deadline day.

Our Goal at Brimmer Financial is to Help You Achieve Your Financial Goals. Do you know the amount of money you will need to supply you with the purchasing power for a retirement that might last 25 to 30 years? If not, we can determine that number for you using methods that Certified Financial Planner™ professionals have used for years. Do you have the right amount of the right kinds of insurance? If you’re not sure give us a call. Do you have up-to-date wills, powers of attorney, health proxies or trusts, if appropriate? If you don’t have a will that you wrote, the state has one that they wrote under the laws of intestacy.

As always, call or email us with any questions.
Robert Brimmer
DISCLOSURES – The views expressed contain certain forward-looking statements. Although they are forecasts, actual results may be meaningfully different. The material represents an assessment of the market and conditions at a particular time and is not a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding any security in particular. The opinions expressed here are the author’s and do not reflect any opinion of National Securities Corporation, member FINRA/SIPC, my Broker/Dealer, or any of its Affiliates. Source material for this letter include quotations from http://www.therichest.com/rich-list/rich-countries/the-only-5-countries-in-the-world-living-debt-free/; from: https://www.archives.gov/federalregister/ electoral-college/about.html; From: John Ferling- smithsonian.com November 1, 2004; From: April 15, 2016 edition of the Washington Examiner a quote from an article by Jason Russell; From: The 4% Solution: Unleashing the Economic Growth America Needs, 2010 And: http://www.bankrate.com/finance/taxes/10-common-tax-filing-mistakes-to-avoid

Securities offered through National Securities, Member FINRA/SIPC