Monthly Archives: December 2019

Karl Eggerss was interviewed on CBS by Sharon Ko discussing the new SECURE Act.  Some of the changes will likely affect your retirement.  More financial planning will be necessary to optimize your retirement and minimize taxes.

Sharon Ko:                         A new law is going to change the rules when it comes to retirement savings. Here’s more on what you need to know about the Setting Every Community Up for Retirement Enhancement Act. What is the SECURE Act and what will be different?

Karl Eggerss:                      The government’s always looking for ways to try to help people save for retirement, to invest in their retirement, because we don’t have pensions as much anymore, and social security is such a small part of people’s retirement needs. The two main things I think that’ll affect our viewers is that if you have an IRA, an individual retirement account, at 70 and a half, the government makes you take out a portion of it every year based on your life expectancy for the rest of your life. They’re pushing that age back to age 72. The reason that’s beneficial is because if you don’t need that money, you would prefer it grow a couple of more years and you don’t pay taxes on it for a couple more years, so that’s a good part about it. To help fund that, the government’s also going to change the rules for inherited IRAs. So if a viewer has a parent that passed away and they were left their IRA, their parent’s IRA, under the old rules, you could take that money out, a portion of it every year based on your life expectancy.

It didn’t matter if you were 20 years old or 50 years old, they would calculate your life expectancy and you would take out a portion of that money for the rest of your life. They are shrinking that down to 10 years now. So if somebody passes away in 2020 and leaves an IRA to a non spouse, this does not include spouses, a non spouse, that person has to take that money out over a 10-year period at the maximum. It used to be over your lifetime. So those are the two biggest things.

There’s also some things in the SECURE Act that are going to help small businesses with their retirement plans, because it’s been kind of cost prohibitive for smaller businesses to really get retirement plans for five, 10, 20 employees, and they’re trying to make things a little easier for those companies as well. So those are probably the biggest three things that came away from the SECURE Act. So it’ll help some people, it’ll hurt some other people, but generally speaking, it’s all in an effort to help folks save more and to rely more on their savings in retirement. Because again, social security isn’t going to do the trick.

On this week’s show, Karl looks back at 2019 and gives listeners a glimpse into 2020 and how we should approach it.

Hey good morning everybody. Welcome to Creating Richer Lives. Hope you had a great Christmas and an upcoming happy New Year. Our telephone number, (210) 526-0057, our website, my name is Karl Eggerss and as I mentioned, hope you had a great Christmas and this is our last show of the year, so it’s been a great year, not only for the markets but for our company. For me personally, a lot of changes. As you know, kind of midway through the year Eggerss Capital Management merged with Covenant and we couldn’t be happier. We’re doing some really good things together and we look forward to 2020 to bring you more information, more education. You know, we do a lot of audio, we obviously do some video in terms of television interviews and articles from some of our, our key people in advisors really bringing you information in their specialty.

We have a lot of people that specialize in a lot of different areas. We’re going to continue to bring that to you in 2020. Hopefully we will roll out some more of our own video, maybe some round tables, things like that. And of course more interviews as well. And we’ve gotten a lot of good feedback on Covenant U, which we rolled out, probably sometime in September. And just a reminder Covenant U is our educational piece that goes out every Monday afternoon. And essentially what we do is anything we’ve posted on the Covenant website, it’s in that email in one email. And so instead of bombarding you with emails every time we put something on the site, because sometimes we may put one or two things on on a day. Instead of sending you multiple emails, we just send one per week and it has everything in there.

Now if you want to continue to get the podcast when it’s released or anything when it’s released, you can check our website, you can subscribe to Apple podcasts or Spotify or Stitcher. We are on all those platforms and the podcast is on there and of course all of our articles, anything we do, radio interviews, television interviews, pieces we put on there are going to be on right on the main page. Now if you want to get Covenant U sent directly to your inbox on Monday afternoons, just go to our website and you can sign up for it there and if you need our help, of course, (210) 526-0057 or

The show, as I was talking about just a minute ago, has been brought to you by Covenant. I should say “is brought to you by Covenant” it wasn’t “has been”, it is brought to you by Covenant.

At Covenant, one of our goals is to really unburden clients from the daily cares of financial management. We do that each and every day and we’re going to continue to do that. If you didn’t know, this past week, the Secure Act was passed, I’ll be talking about that on a television interview tomorrow morning. If you’re in the South Texas area on CVS, I will be discussing the Secure Act and really a few…

It was really kind of quiet the last few months and we’ve, we talked about it on the Podcast with one of our financial advisors, David Akright, who came in a few months ago to tell us about how it was shaping up. I remember it was passed in the house and it was going over to the Senate and I thought, and I think David thought, there would be some changes to this Secure Act and I don’t really think there was any modifications to it, but it got signed, it got done.

The two main things that you probably will affect you more than anything, most of our listeners, is going to be the inherited IRA. So if you inherit an IRA the next few years from a parent, sibling, you will have 10 years to take that money out as opposed to over your lifetime. That’s one major change. The second one is the Required Minimum Distributions, RMDs will not start at 70-and-a-half. They will start at 72.

Those are the two biggest things coming out of this that I saw. Of course there’s some other things and I’ll cover some of those in my television interview, which we will post next week on the website.

We had that going on, and really this week in the markets was really all about what some are calling this blow-off top. When they say a blow-off top, that insinuates of course that it’s the top, it’s over and it’s easy to have our minds look at the stock market going up, tremendous year of real big run into the end of the year. The Santa Claus rally saw a tweet today saying Santa is not playing around, he’s not. Stock market doing very well coming into the end of the year. Our minds want to look at that and say, “well, the calendar ends December 31st so because the calendar ends, naturally, something has to change on January 1st”. Well, the only thing that really has to change is the fact that we’re in a new tax year.

Is it possible that we get a sell-off in January? It’s likely. How much it is, what you do about it, very difficult to navigate. People could have said that a month ago, three months ago, six months ago, but we are in the short term overbought, which is a technical term, meaning everybody’s in the deep end of the pool. Everybody’s in. I mean we saw on a week ago Friday the SPY, which is the Spiders they call it. It’s an ETF that mimics Standard and Poor’s 500 index, 500 of the largest companies in the U S took in $11 billion. It was the biggest one day flow in several years and it’s up was the fifth all time for an ETF. That was a week ago Friday.

Money is pouring into the stock market and as I’ve reiterated the last few weeks, the biggest difference between what we see now and a year ago is the fact of, not only has the Fed dropped rates, but they are signaling that they’re not going to raise them anytime soon. That’s at least there, when they speak. You have to read between the lines, but that’s what the market is celebrating, that not only did they get the message that hiking was the wrong move a year ago and they stopped that dead in their tracks and reversed it and actually cut interest rates three times, but they may be on the sidelines for a while longer.

On top of that and something that doesn’t get talked about a ton unless you’re watching the financial media a little bit, mainly on Twitter or something like that, or if you’re following Wall Street, is many believed the Fed is engaged in “quantitative easing” and that phrase you hadn’t heard for several years because the Fed was shrinking their balance sheet, they were tightening essentially, they have reversed course and are loosening once again. That is a powerful thing driving the stock market.

It’s not just the fact that the economy at least in 2019 averted a recession because it was slowing down. We were saying for several weeks close, right? We’re close to a recession, but we didn’t think we’re going to have one, but we were vulnerable and many believed we would have one. Therefore the stock markets started to struggle a little bit. There were some times they pulled back. Seven percent I think was the biggest pullback we saw in 2019 but that fear was very brief and we averted that. Didn’t see a recession in 2019 and so the stock market and Wall Street and investors poured money back into the stock market.

At the same time, the Fed was cutting rates, and at the same time, and this is again very important, is that they started increasing their balance sheet again: quantitative easing. They will say, “we’re not doing that, that is not what we’re doing”, but they did.

Remember, a few months ago the repo problems we talked about on the Podcast where there were some problems with overnight lending, where basically there’s banks trying to borrow and they couldn’t do it. And so the Fed had to step in and we chalked it up to a technical glitch. Many did as well. But it has continued and as it’s continued, the Fed has injected money into the system. Trying to grease the wheels, if you will.

That combination of a good economy that avoided a recession, the Fed dropping rates and injecting money in, is the recipe that, gets the stock market up 20 something percent this year, 30 something percent depending on which index you look at. Is that also the thing that makes the bears go, “you know what, isn’t this kind of what got us into some trouble in the past?”

Maybe, but what we do is, again, we’re focused on two things. From the client perspective, we’re focused on building an allocation that makes sense for them and their situation, based on their cash flows, their basic financial plan, maybe their in-depth financial plan, maybe their legacy goals, what are they wanting to leave to charity or the next generation. We’re building a portfolio based on the long term for that. In the short term, how do we, how do we maneuver through this stuff? And really, what we’re doing is looking at the economy, looking at interest rates, studying not only the fundamentals, but the technicals and we’re looking at sentiment. And right now, sentiment is pretty darn good, which is a contrarian indicator. When you see record flows into the stock market, it makes you go, “you know what, this kind of getting one sided”.

Remember, we were talking about how money was flowing out of the stock market and money was going into the bond market a few months ago, even just a few weeks ago. Well now it’s seems to be going the other direction. It’s going into the market, which again is propelling stocks up, but it’s also causing us maybe to pause a little bit and say, “do we need to adjust anything at this point?”

Now again, as I said, the reason it’s important this time of right now is because we’re ending the year and we get into a new tax year. And when that happens, people lock in gains. Because if you sell something on January 1st you don’t have to pay taxes on it until April of 2021 right? So you could see some adjustments in January. Will it be like clockwork? Who knows? I think we know the market’s overbought. What we don’t know is what happens when it pulls back because you can look back and there are several statistics that would show that yes, short term we’re due for a pullback, deferring new purchases may not be a bad idea. Rebalancing, as I’ve suggested in past shows is a definite right. You just need to re… Take some cream off the top, right? And reallocate.

Sometimes statistically we have been looking at some things that show us that when we have these overbought conditions, yes, you may get a short term pullback, but it oftentimes leads to more gains in the long-term bull market. That’s really important to understand that just because we’re overbought doesn’t mean that a top is put in. As I’ve said many times for many years on this Podcast, tops are a process. They roll over. You see deterioration, and I’ve used this analogy before, it’s as if you’re driving on the road and your hubcap falls off. I don’t know who still has hubcaps, but let’s just play along. You have a hubcap, right? Okay, your parents’ car had a hubcap. You’re driving along, you have a hubcap and the hubcap falls off and then another one falls off and then the tailpipe falls off and then some paint flakes off and then the side mirror falls off. The car’s beginning to disintegrate and fall apart as you’re driving along.

That’s what happens when you’re transitioning from a bull market to a bear market, it’s classic. You see deterioration. We’re not seeing that right now. Then usually that deterioration happens months in advance. You start to see less and less stocks participating, which is equivalent of paint flaking off the car. The tailpipe fallen off. That’s what happens. Sector by sector starts to fall off. We’re not seeing that right now, so there are still internal strength in this market. Supply demand is still good based on all the stuff that I look at, which is more on the technical side.

On the fundamental side. Yes, you’ve had earnings flatten out and the stock market continue up. Either the stock market comes back into line, or the stock market, or investors are predicting, that earnings will start to accelerate once again. We don’t know and it’s hard to project that out, but it’s something to watch.

There’s been multiple expansion, they call it. The PE ratio is going up as people are paying more and more for stocks in anticipation of who knows what. Yes, we’ve got the tariff kind of easing back. We’ll see if Trump rolls some more back. China obviously said, this was on Monday, they were reportedly, “we’re going to lower tariffs on hundreds of products in 2020”. That de-escalation is really helping sentiment as well.

There’s a lot of good things going on that would cause people to buy stocks, but what’s priced in, that’s what we don’t know.

You know, is all the tariff good news priced in? The loose Fed, is that all priced in? We don’t know. So we can monitor. All we can do is number one, from a market perspective, we can look at sentiment and say, yes, people are all in on this market. They like it. That’s a problem. It’s a contrarian problem. Number two, we can look at our technical indicators and they’re overbought short term. Long term still looks good, but the other thing and the most important thing I think is for you to look at your situation. Just because the stock market is up a lot this year does not mean that you should have made more money because you may not own 100% stocks. Do you know that semiconductors for example, are up about 60 some odd percent this year. Now, you could look at that and say, “I wish I owned semiconductors. I should’ve bought more of those. I should have owned more of those.” I mean, technology itself is up almost 50%, five zero, so it’s easy to say, “yeah, I should own more of that. I should own more stocks.”

Forget about that. What you should have done is depending on what you are trying to do in the long term with your portfolio, if it’s money that you don’t need, if it’s money that is multi-generational, perhaps that’s money that can be at risk and can be more equity allocated on stocks and yes, that money probably is going to be up in the 20s or even 30 something percent this year, but for those that are not wanting to take all that risk looking for income, you’re not going to be up that much. That’s okay. You’re still fulfilling what you’re supposed to be doing if you’re doing it correctly.

I mean, I see so many portfolios that are literally just a popery of different investment ideas and themes and they have nothing to do with what the client’s trying to accomplish. I talk to people sometimes they say, “here’s my portfolio. I’m a little nervous” and I look at it and say, “you should be nervous because what you own does not match what you’re telling me, and in terms of what you’re trying to accomplish in terms of your fear.” “Well, I’m scared we’re going to have a pullback.” “Well, you should be scared because you are pretty risky, but you’re telling me you’re not that risky but your portfolio suggests otherwise. There’s a mismatch.”

That’s really what we do every day, is analyze that for folks, come up with a plan and then build a portfolio. Now in that portfolio, we’re making overweights, underweights we’re making tactical allocations to different things for different reasons and that’s the fine tuning of the portfolio.

What you should not be doing is what you will hear over the next few weeks. Well, the stock market has gone straight up and we’ve got an election coming up and I, I think I’m going to move 50% of my money to the sidelines. That’s just a recipe for disaster. Look at December 24th of 2019, I was actually buying that day in the pit, in the belly of a very scary straight down market that had fallen almost 20% across the board because it was the Warren Buffet quote, right, there was blood in the streets. And so we bought some that day. You fast forward till now, it’s a complete opposite situation. But back then people are probably doing that. I’m scared. I need to get out, I need to protect my retirement. And they were selling down at the lows instead of doing what they should have been doing, which is staying disciplined and buying just like, here we are now.

Don’t get too cocky. Don’t get too cute with this market either. Now before you run out and say, “okay, Karl says we’re overbought,” we could look for little pullback. He says not to overthink this, and don’t go crazy with the portfolio and move a bunch of stuff around. That’s true. And the reason why is because, if you look back, you know, especially given what happened in 2018, I think I said December 24th of 2019 a few minutes ago, I meant 18, but if you look back a year ago for the year of 2018 the stock market was a tough, tough place to be. Whereas if you look at it this year, it was a great place to be. It’s not number one who cares a year by year, right? Who cares if it’s had a great May or a bad December that that doesn’t matter.

You put, you put 18 together with 19, it’s pretty clear now what was going on, which was tariffs and Fed hiking in a slowing economy. Those were, that was a recipe for a tough, tough market and we went sideways from January of 18 all the way through most of 19. Finally when you started to hear that we may get a trade deal and the Fed started cutting rates, basically undoing all of that stuff we were talking about, the economy stopped decelerating and at least flattened out. Everything started to get better again.

But when you put those two years together it’s good, but it’s not so outrageous that you got to be taking a ton of money off the table. This is not March of 2000. There are some pockets in the market that are very extended but the market as a whole is not. We still have good broad based participation, and again, at the end of the day, it’s supply and demand, and supply and demand looks very good to me.

You’re starting to see rates move up as well, right? That was something that we’re sitting at about one point almost 1.9 on the 10 year. We had touched down to 1.4 back in September and those were interesting because that was the same level we touched back in 2016. Will we get back to 3% which is where we were mid 18, who knows, but we definitely broke out technically and you’re starting to see some money move out of bonds a little bit, but a lot of that money’s flown into the stock market and you’re also seeing money go into areas like gold. You’re starting to see some of the foreign money or the foreign markets do very well. They didn’t have as good a year as the domestic markets, but you’re starting to see a little bit of movement, especially emerging markets, really doing well the last few weeks as the dollar…

Maybe the dollar starts to struggle. That’s something you have to watch. The dollar has rolled over very clearly now. In fact, it’s at its lowest level since maybe July. That dollar pulling back is going to be good for gold. It’s going to be good for commodities in general. It’s going to be good for foreign markets and that just helps everything in terms of broadening out what’s working. So very good into the year and again, let’s see what happens in January. I think we’ll see a little bit of rotation as we move into November. Obviously the election is going to play and have an impact on the stock market. But don’t overthink it now and again, be so cute to think, “well you know what I’ll do, I’ll just take my profits from 2019, I’ll park them on the sidelines, I’ll wait till the stock market drops and then I’ll buy right after the election.”

How did that work the last time? It didn’t work very well in terms of the timing and moving all that money back and forth. So again, go back to, what are you trying to do, and build a portfolio from there. We will help as best we can educate you and guide you through that the next several months as we go into 2020.

If you need some specific help, specific questions, how does the Secure Act affect you? How does Social Security and Medicare? Should you take up pension versus a lump sum? Those are questions we get every single day and a lot of times we will find ways to optimize that for folks and actually increase what they could have received. We will do tax strategies for them sometimes that again, wring out extra dollars that were not there or they didn’t think that were there. These are strategies we put in for people every day. If you need that type of specific help (210) 526-0057 or go to

Alright, have a wonderful New Year’s Eve and we will see you back here on Creating Richer Lives. The podcast in 2020, weird to say. Alright. Have a great rest of your weekend guys.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and there can be no assurance that the future performance of any specific investment, investment strategy or product, including the investments and or investment strategies recommended or undertaken by Covenant Multifamily Offices LLC, Covenant, or any non-investment related content, will be profitable, equal any corresponding indicated historical performance levels, be suitable for your portfolio or individual situation, or prove successful.

Moreover, you should not assume that any discussion or information serves as the receipt of, or as a substitute for, personalized investment advice from Covenant. To the extent that a listener has any questions regarding the applicability of any specific issue discussed above to his her individual situation, he, she is encouraged to consult with a professional advisor of his or her choosing.

Covenant is neither a law firm nor a Certified Public Accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of our current written disclosure brochure discussing our advisory services and fees is available upon request or at

On the Trey Ware Show, Karl Eggerss was interviewed and discussed that the economy is generally good and the stock market is at new all-time highs, but some investors are still skeptical.  Karl explains why that could lead to more long-term highs.

Trey Ware:                         Karl Eggerss from joining me now here at KTSA. Karl, I got this new CNN poll. They really had to swallow hard over at CNN and they said this, “As 2019 comes to a close, the US economy earns its highest ratings in two decades. Overall, 76% of people rate the economic conditions in the US today as very or somewhat good, significantly more than those who said so at this time last year, it’s the highest share to say the economy is good since February 2001.” They really had to swallow hard over at CNN to say that.

Karl Eggerss:                      Well, you can’t … I was going to say, you can’t make up stuff, but nevermind, I won’t go there. Yeah. It’s interesting because everybody agrees the economy has been doing very well and improving. What’s interesting is that there’s still a lot of skepticism around the stock market and how can it be at these highs and everything when, again, we go back to what you and I’ve been talking about, which is when the economy has improved and the fed kind of stays out of the way, meaning they’re not raising interest rates, stock markets do very well. But you still have the skepticism, which for those who invested is a good thing because if you have skepticism, that means there’s money still on the sidelines yet to be put into the stock market. And as it makes new highs, people kind of capitulate and say, “You know what? Maybe I’ve been wrong about this. I should buy some stocks and mutual funds, et cetera.”

Trey Ware:                         Well it looks like a good day today. The Ministry of Finance in China announced today, “Tariff cuts effective January 1 on frozen pork, asthma and diabetes medications, integrated circuit boards, and about 850 other products intended to promote the coordinated development of trade and environment,” China said. That’s got to be good news and will resonate in the stock market today.

Karl Eggerss:                      Yeah, you get that de-escalation. I mean it started, everybody … when it kind of amps up, you saw this in the last few months, whenever we would say, us being the US, “Hey, we’re going to put more tariffs on China,” would come back and say, “Well, us too.” And obviously now what you’re seeing is the complete opposite of that.

By the way, Trey, something that didn’t get talked about over the weekend is the SECURE Act got passed, which is going to help retirees out a little bit in terms of, at 70 and a half, you have to start taking money out of your IRA. That is going to be pushed back to age 72 now. So that’s going to impact a lot of people driving around listening right now.

Trey Ware:                         Very cool.

Karl Eggerss:                      So might want to check out the SECURE Act.

Trey Ware:                         Very cool. Thank you, Karl. Appreciate it. Merry Christmas to you and yours at, that’s

By Justin Pawl, CFA, CAIA

In this week’s edition:

  • Last Week Today.  A quick list of market-moving news.
  • Eco Data Updates. Data from last week shows the U.S. economy is stable, but Europe continues to look for traction.
  • Partisan Pants. Consumers are literally wearing their political views.

This is the final 5-Minute Huddle of 2019, as I break from writing next week. As described below, 2019 was a very good year for financial assets, but on the social and economic fronts results were mixed, as is often the case.  On a global level, collaboration appears to be waning both between and within countries.  A long time ago humans formed groups for protection.  An unintended consequence of people interacting with one another was innovation.  From crude tools developed eons ago, to more recent developments like the Internet and the International Space Station, humans are social beings that with good leadership have unlimited potential.  My hope for the coming decade is that people once again recognize the power of collaboration, and like the endless supply of energy potential of cold fusion, actively seek to harness it’s benefits.

Last Week Today. The House of Representatives formally approved NAFTA 2.0 (aka, USMCA), a day after they voted to impeach President Trump. Normalized trade relations between the U.S., Mexico, and Canada (valued at about $1.2 trillion) may be a bigger boon for the U.S. economy than the China trade deal where the U.S. exports/imports were only $180B/$558 billion in 2018. Regardless, for the time being, investors care more about China. | Boeing, shuttered production of the troubled 737 Max aircraft, pending FAA approval. Boeing’s move is expected to reduce Q1 GDP by about 0.5% but should be temporary assuming Boeing begins shipping planes in Q2 as currently planned.

All three closely followed domestic equity indexes closed the week at record levels as the seasonal Santa Claus Rally added to already impressive year-to-date gains. The shift in investor sentiment vs. a year ago, when equities were in free fall, is remarkable. The reason? The Fed. Ultimately economic fundamentals will determine corporate profitability and the direction of stocks, but the market is susceptible to emotional swings. Last year the Fed raised interest rates 4x and jammed coal in investors’ stockings when they forecast three additional interest rate hikes in 2019. Of course, the Fed’s forecast was mistaken, and, thankfully, the Big Brains determining monetary policy had the humility to reverse their planned course of action and cut rates in 2019. Retreating from their tightening path, the Fed almost assuredly prevented a recession this year and, following 2018, when cash was the best performing asset, risk assets ruled in the final year of the decade. At the risk of being a downer during this jubilant time of the season, it’s worth noting that several measures of investor exuberance are flashing yellow, if not red, indicating the market may have gotten ahead of itself. It’s an excellent time to check your portfolio allocation to ensure that after the great run of 2019, that you know what you own, why you own it, and that your allocation hasn’t drifted outside of your specific goals.

For detailed weekly, MTD, and YTD financial market performance (which is a tidal wave of green numbers), please click on the table below.



Eco Data Updates. As the decade comes to an end, last week’s data shows the U.S. economy is on reasonably stable ground and our theme of “Good, but not great” growth remains largely intact. However, the Eurozone economy continues to muddle along and negative interest rates don’t appear to be the antidote.

  • The Eurozone manufacturing Purchasing Managers Index (PMI) fell from 46.9 to 45.9 in December (a reading below 50 indicates negative growth). Employment growth also fell to a 5-year low. If there is any good news, it’s that fiscal stimulus in both China (which should bolster European trade) and Europe is projected to buoy growth in the Eurozone; perhaps it will show up in 2020.
  • U.S. Housing is benefiting from lower interest rates as indicated by growing sales, a 20-year high in the NAHB sentiment index and accelerating single home construction.
  • U.S. Manufacturing sector growth appears to have bottomed.
  • U.S. Labor Market is healthy. The chart below shows just how far we’ve come as, except for wages, all labor market categories are above pre-Financial Crisis levels.


  • U.S. Consumers remain well-positioned to do the heavy lifting in the economy, and last week’s Confidence Data hit a seven-month high.


  • Household leverage is at its lowest level since the Financial Crisis, wages are growing, and the savings rate (at ≈8%) is above the 7% historic long-run average. The chart below shows debt levels for non-financial companies (NFC), households (HH), and the U.S. Government. Note that following the Financial Crisis, the Government took the torch from consumers as the leader in leverage. The government’s high debt levels will present new challenges for the economy at some point, but not in 2020.


Partisan Pants. Last month the Wall Street Journal published an interesting article on how American consumer choices are increasingly reflecting political views. For example, consumer research data shows that Democrats are more likely to wear Levi’s jeans while Republicans favor Wrangler brand jeans. Indeed, over the last 15 years, Levi’s popularity amongst Republicans fell while Wrangler’s jumped 13 percentage points amongst Republicans. As the article relates, there’s no easy explanation for the change in consumer preferences. Likely contributory factors include social and political stances companies are taking (e.g., Levi’s support of gun control) as well as geographic shifts of the political parties (rural counties becoming more Republican and urban areas more Democratic).

The article doesn’t mention it, but logically, advertising also plays a role in the increasingly politically partisan consumer choices. As the chart below highlights (and which should be a surprise to precisely no one), over the last 15 years, CNN and Fox News are increasingly favored by specific political parties. The preference shifts amongst voters for several other popular brands are shown in the chart as well. Do you think companies are paying attention to viewer demographics and spending their advertising dollars accordingly?


Yes, they are. “It doesn’t matter how many people hate your brand as long as enough people love it,” Nike co-founder Phil Knight shared with students at Stanford earlier this year. In a similar vein, the CEO of Unilever PLC (maker of Dove soap and Breyer’s ice cream) is on the record with “I really profoundly believe that seeking this mushy middle ground, that’s not how the world is anymore.” As the political world becomes increasingly polarized, so are companies’ advertising campaigns.

The evolution of consumer preferences reflects a broader trend of the world becoming increasingly divided and narrowly focused. For example, globalization is giving way to international protectionism, and middle-ground politicians are ever scarcer on either side of the aisle both in the U.S. and abroad. While blind conformity is the enemy of innovation, focusing too intently within promotes isolation, intransigence, inefficient allocation of resources, and slower global growth that is bad for everyone. Hopefully, the new decade brings with it, at some point, a renewed spirit of collaboration.

Be well and Happy New Year/Decade,


Karl Eggerss was interviewed on CBS discussing how to create a New Year’s Financial Checklist.  This is the best time of year to establish a financial plan.

Sharon Ko:                         2020 is fast approaching. How about kicking off your fresh beginning by getting your finances in shape? Here’s your top five Money Smart checklist.

Karl Eggerss:                      Check your beneficiaries. There’s changes in life and you may want to check your beneficiaries on your 401ks, your life insurance, your retirement accounts. Are they still who you wanted them to be when you set them up? I think the second thing you need to look at is your retirement plan. Look at the allocation. In a year where the stock market goes way up, you may have too much stocks than what you originally intended, so you may need to rebalance, they call it. Even if you do that annually, it’s a good time to do that. I think also take a look at your debt. Do you have some smaller debts out there that you could pay down or pay off? Get rid of those. It’s a nice time to start fresh in the new year and get some of those smaller debts paid off.

I think the other thing is, look at your employer benefits. If you are working for a company, this is the re-enrollment time, generally, the late part of the year, in terms of how much you’re putting into your 401k. Is there life insurance available to you free or at a very low cost? Have you checked your deductibles to see are they too low or too high? And then, I think checking your wills and your legal documents, just again, to make sure that things are going to go where they’re supposed to if something were to happen to you or, if you become incapacitated, who’s going to make those decisions on your behalf? So, the legal documents kind of time to the life insurance and the insurance in general, but it’s a good time to check all five of those things.

Sharon Ko:                         Would you recommend maybe setting financial goals just as much as we maybe set our weight goals?

Karl Eggerss:                      Personal goals?

Sharon Ko:                         Yeah.

Karl Eggerss:                      Yeah, the gym memberships tend to go up in January, because everybody sets these personal goals and it’s a great thing to do, but financial goals, to your point, excellent time to do it. It’s just a good reset at the end of the year to say, “What did I do right or wrong? Did I get a raise? And if I got a raise that’s going to kick in January 1st, am I going to save that money? Am I going to spend it? Am I going to pay down debt?” So, again, it kind of goes back to budgeting, but also just kind of assessing the cash flow and financial goals.


On this episode, Karl Eggerss welcomes Casey Keller to the studio to discuss active investing versus passive investing.  Is one way better than the other?

Karl Eggerss:                      Hey, good morning, everybody. Welcome to Creating Richer Lives, the podcast. My name is Karl Eggerss. We thank you for joining us. As always, just a reminder, is our website.

Ton of information on there. We’ve got all types of articles from a lot of Covenant folks. We have podcasts, we have TV interviews, radio interviews, all with a bunch of information that we hope can help you make better investment decisions or answer some questions you may have had, so that’s the goal of the website. Our telephone number, 210-526-0057, and the podcast is brought to you by Covenant. Lifestyle. Legacy. Philanthropy..

Again, Hey, in just a little bit, we’re going to talk about active investing versus passive investing. You’ve heard a lot about it in 2019 especially. We’re going to bring Casey Keller, Chartered Financial Analyst into the studio to discuss which one’s better if either, but before we do, interesting week in the market as we saw new highs reached again for the stock market, and it was on a week where we saw the President impeached. I had been asked on some different media outlets the last couple of months what I thought a potential impeachment would do to the stock market, and I said that I didn’t think it would do anything to the stock market, and that’s what’s happened because the stock market is, number one, bigger than that. There are bigger issues, such as interest rates, the economy, profits of companies, trade, and a lot of those things are kind of going the right way in the short-term here, and so the impeachment, and ultimately what happens with an impeachment, what happens to the President, and most believed nothing, so therefore, it was a non-event for the stock market this week.

Kind of baffled some people, but this is something we’ve been saying the last several months. What we do see going on, and again, kind of the, as we wrap up the end of the year, the biggest, if you could really isolate the difference between where we are now versus a year ago, it really is that the economy, what was looking to be slowing down and maybe slipping into a recession, the risks were moving up, the yield curve got inverted, and the fed was trying to lower rates after they were going to … They were raising them in 2018, and they were trying to lower them as quickly as they could to prevent a potential recession, and they look like they may have succeeded, but at the end of the day, we went from potentially three rate hikes in 2019 to three rate cuts, and the economy may have come in for a smooth, soft landing where it didn’t ever recess. Now, some are still saying we are still going to, and I would say yes, at some point. I can’t tell you if it’s 2020 or 2030.

Recessions are normal, so we will have one, but we didn’t believe that we would have one in 2019, and we didn’t. We did say that it was going to be close and we weren’t having a slowdown. We saw that. There was a lot of evidence of that, but the fed lowered interest rates, the economy didn’t collapse, we’re actually seeing some really good things in the economy. Some mixed things still, but still a good economy, a good jobs market.

The housing market has been improving quite a bit. You put all that together with an easy fed, and you have new highs. Now, as we enter next year, we need to watch for, yes, the election. The election will be coming up in 11 months or so, and we will likely see some volatility. This is the time to start thinking about, “Have you been cheating on your portfolio?”

In other words, do you have an allocation, and it got out of whack because the stocks have done so well, and you’re now out of balance, and you want to stay in those stocks because they were doing so great and you’re making money, but you need to be true to your long-term allocation, your long-term plan so you might be needing to rebalance and trim some of the stocks, mutual funds, ETFs, and rebalance into some things that maybe haven’t done as well? Now, I would caution you, here we are, December 21st. You can wait until January second to go in and reallocate in terms of locking in capital gains, but look at the IRAs. That’s nothing you have to wait on, so you could be doing some rebalancing right now, where you do it and how. That’s your specific situation. Of course, we can help you with that if you needed us to. 210-526-0057, and that’s what we’ve been spending some time doing.

This is the time to tax-loss harvest, which we discussed a couple weeks ago on the podcast, but that’s also a time to look forward to 2020, what’s it going to bring? I don’t mean what’s it going to bring for you to sit there and try to predict and make massive changes to your portfolio, but you need to be thinking about, if volatility comes back or when it comes back, which it will at some point, are you going to do anything then about it or are you going to not do anything then about it, or are you just going to say, “You know what? I have the allocation that I should have right now”? What are you going to do? Start thinking about that now while the times are good, because they won’t always feel this way. Remember how bad you felt last Christmas Eve when the markets were sitting at 20%, a drop of 20%?

That was the time to say, “I got to jump in the deep end, and I got to go buy some stuff. I got to go buy some stocks because they’ve sold off.” We may be on the other end of that right now, where you need to be trimming a little bit, potentially, again, depending on your situation, and it doesn’t mean when you sell stocks, or mutual funds, or ETFs that you necessarily need to be parking in cash. It could just mean that you need to take it from an area that is extended, overpriced, what have you to another area that is a little cheaper, a little better bargain, and so not suggesting to sit on the sidelines, but if you did build some cash, it’s not the worst thing in the world. We have a little bit of euphoria right now.

It’s not the type of run we saw in January of ’18, almost two years ago when the tariffs were first announced, and that was kind of that huge run-up into that, and then the word tariff was introduced, and down we went. It’s not that type of run-up, but it’s a pretty persistent run-up right now. It’s a … The market is, it’s not going up dramatically, but it’s going up pretty consistently almost every day, and so let’s watch as we move into the New Year, so really examine your portfolio right now, but you can’t have a portfolio in isolation without having a plan of where you’re going to go, and so that’s what we’re going to be talking about today in regards to active versus passive and your portfolio. All right.

As I mentioned earlier in the podcast, we have an in-studio guest, Casey Keller, Chartered Financial Analyst, who is another team member here at Covenant. Casey, welcome back to the podcast.

Casey Keller:                      Thanks, Karl. Glad to be here.

Karl Eggerss:                      Earlier in the year, probably sometime in the summertime, Michael Burry, who of course was the famous hedge fund manager who really bet against the housing market, and there was a movie based on him. He was a doctor, turned hedge fund manager, and super brilliant, eccentric kind of guy, and made a lot of money. He was early, betting against the housing market. He actually invented securities to benefit when housing prices went down, ended up making a ton of money, and he’s been kind of quiet the last few years, but he popped up earlier in the summer and was talking about that there was a bubble in a particular area of the stock market, and he was talking about active versus passive, and a lot of people didn’t really understand what he was talking about necessarily, and we’re not even going to try to decode it, but we did want to discuss today, does active versus passive even matter? The point of the conversation is most people …

We’ll kind of set the table here. Most people, when they think of active investing versus passive, they really are … I think most people think of trading versus buying and holding. Active means, “I’ve got to do something,” “I’m taking profits,” “I’m putting stop-losses,” “I’m generating lots of taxes and transactions,” and passive, “I’m just going to buy it and set it and forget it,” like the-

Casey Keller:                      Buy and hold.

Karl Eggerss:                      Yeah, buy and hold like the rotisserie chicken guy, set it and forget it, but it’s not really about that, is it? I mean, there’s more to it than that, and then we’ll kind of get to where, I think this will lead us, which is, does it really matter what you call it or what it is? In your mind, I mean, I described it as kind of active versus passive, meaning how much you do versus not, what’s your kind of definition when you think of active investing versus passive investing?

Casey Keller:                      That’s a good question, and I think those terms are thrown around all over the place in the industry, and in literature, in articles, and on TV, and so it creates a lot of confusion, and there are …

Karl Eggerss:                      Right.

Casey Keller:                      Yeah, I think it can be used in different contexts, but I think that one thing that comes to mind right off the bat is kind of this emergence of index funds or ETFs, a lot of times are considered passive funds because there’s not a manager selecting the underlying securities in that fund. You’re buying an index fund, which means you just want to own whatever that index is based on, for example, the S&P 500, versus a mutual fund or historically, a mutual fund where their job was to try and beat an index like the S&P, so you would have a manager that would buy securities, and if their job was to beat the S&P 500, they’re not going to buy all 500 securities. Maybe they buy 50 or 100 of them, and they think it’s the 50 or 100 that are better than their other 500 or they’re the best 50 or 100 in the index so they can outperform, or they buy the 500 and weigh them differently, or some way, they’re making a bet versus an index. That’s one thing that comes to mind, as another way of people look at it.

Karl Eggerss:                      What’s interesting is if you as an individual buy an exchange traded fund for example, it’s a low turnover index, no manager, you’re still doing something. You are being active by purchasing that particular one versus another one, so I guess my question is, “Is there anything that’s really is passive?” Like, “What is passive investing at the end of the day?” Right? You have to be active to a certain extent.

Casey Keller:                      I think that’s a great point, and I think that you can buy the S&P 500. That’s the only thing you own, I believe you are making an active bet because the S&P 500 is just 500 stocks. There’s thousands of stocks worldwide, and of course, globally, so the S&P 500 is just the U.S. stocks and-

Karl Eggerss:                      But you’re also making a bet to buy stocks, right? What about bonds? What about commodities, real estate? You’re making an active bet to even do that.

Casey Keller:                      You are. Yeah, I mean, it’s active in that sense. It’s active that, and not only the S&P 500 is the top five stocks and it make up 16% of that index, so you’re really betting on to some degree, or a large degree, those five stocks, the FANG, the Facebook, Amazon, Netflix, Google and Microsoft, and those make up a big part.

Karl Eggerss:                      Yeah.

Casey Keller:                      You are, maybe indirectly, you may not even know you’re making an active bet, but you are, versus if you own say a global index or like you said, bought a fund that owns real estate and maybe commodities and other … They may have more diversified type fund.

Karl Eggerss:                      Yeah. I mean, I think I know what Michael Burry was trying to get across, which is that there are probably a lot of people in this country, especially that own things that they don’t really necessarily know they owned because they’re massed in a mutual fund, or they’re massed in an ETF, or it’s a fund of funds, in other words, it’s a target date fund, for example, a lot of 401(k)s have the 2035 fund, the 2045, which is really just 10 mutual funds inside one, nice package. We’ve talked about the pros and cons of those in the past and they’re fine, but you’re still making an act of bet, but what he’s talking about, I think is that they’re blindly putting money into something and they don’t really know exactly what it is, and it’s a fairly crowded trade, where is there’s certain stocks that may not be included in those funds that are being kind of left behind and maybe that’s where the value is. I don’t know. Again, there’s a lot of debate what he meant by that and really, I guess the reason I wanted you to come on was does it matter?

I mean, at the end of the day, we’re all having to make a decision about how to put a portfolio together. What you call it active, passive, whatever, I don’t know if that really matters.

Casey Keller:                      It may or may not. I think what Dr. Burry was getting at is that if you … There’s been this movement towards low cost index funds, and so a lot of folks have been buying into that with the premise that they’re low costs, and so that’s better than mutual funds, and that’s the thinking, and so if I can buy the S&P 500 index fund versus a manager that buys large cap stocks, I can do it cheaper and they’re not going to outperform anyway, so there’s this mindset of doing that, and so what’s happened is people are doing that and they’re going, “It’s cheap, and not only that, guess what? It works. It’s been working the last few years,” and so it kind of perpetuate itself, so people are going, “It works.”

“It’s been outperforming and it’s very cheap, so why would I ever do anything else?”, so it becomes as good idea and it’s kind of like what Warren Buffett said. He said, “The biggest mistakes on Wall Street are not from bad ideas. It’s actually from good ideas that are taken to an extreme,” and so I think what Dr. Burry is suggesting is that this may be a good idea on paper and it sounds good, but it may be getting taken to an extreme because everybody’s doing it, and everybody’s going, “This is a great idea because it works and it’s cheap, and everybody does it.” They could be piling on and they are essentially. If you’re buying a bunch of low cost index funds that are investing in the same thing, you’re effectively making an active bet.

Karl Eggerss:                      Active bet, yes.

Casey Keller:                      Yes.

Karl Eggerss:                      Again, I started the conversation by saying we weren’t going to dig into what he meant, and here we are, but to me, it all boils down to you are always making an active bet, even if you’re doing passive investing.

Casey Keller:                      Yeah.

Karl Eggerss:                      Having said that, it really goes back to the financial plan. In other words, a 68-year old who just retired’s goals are going to be different than a 25-year old who has their first job and maybe just got married. They have different goals, and you build the portfolio off of the return you’re trying to achieve. Now, of course, everybody wants as much return with as little risk as possible, but at the end of the day, it doesn’t really work that way. You have to craft a portfolio over time that’s going to fit the goal.

For example, what you were saying earlier, if you have somebody that is 25 and they don’t need bonds in their life, they’re making an active bet to own 100% stocks. Right there, they’re active, period. There is no passive. How they do it is you can do it a lot of different ways, but they’re making an active bet, so to me, is there even such a thing as passive? I don’t really think there is.

Casey Keller:                      I don’t think there is from a standpoint from that context. I do think there’s an active versus passive in the context of if you’re trying to get access to a particular area of the market. For example, if you wanted to buy healthcare stocks, you could go buy an index fund that owns all of them or you can buy a fund that owns maybe five or 10 of them where they’re trying to cherry-pick the best ones, so I think there is a little bit in that context, that debate, but in what you’re talking about, I think everything is an active bet.

Karl Eggerss:                      Right.

Casey Keller:                      Like you said, every decision in terms of building a portfolio, and we know folks, some people like real estate, so they choose to invest in rental properties or any … They’re actively involved in real estate, which may be good, but it may do better than the stock market, it may not, and so they’re actively making a bet that they’re going to either A, they’re going to outperform or they’re just more comfortable doing that, versus somebody that maybe just has all bonds, and they may not keep up with somebody that’s a stock investor, but if that’s what is more comfortable, they’re making an active bet based on their preferences.

Karl Eggerss:                      Yeah. Again, to me, it doesn’t really matter what you call it. If it does go back to the financial plan, and again, somebody needs 7% a year to live the life they want to live, then you go back historically and you say, “What type of portfolio over time could have achieved that?”, but you still have to look at the current environment, right? It’s hard to say, “Well, stocks make X over the last 50 years,” but they’ve made a much higher percentage in recent years, then your expectations got to be lower, so I think we have to … When you’re looking at your portfolio, whether it’s quarterly or annually or daily, you have to look and say, “What are my expected returns?”, so you look at historical.

We know stocks are the best-performing asset class generally over the last 100 years, but you still have to say, “What are my expectations going forward?”, and then back into a portfolio. I think if you want to be even more active, that’s where you do have to say, “Okay. Well, if I need 7% out of my stock portfolio,” and I don’t think the overall stock market’s going to do that, that’s when you have to dig down a little deeper and say, “Do I want to own healthcare specifically versus the overall market? Do I want to own value versus growth or small cap versus large cap, or international versus domestic?” Yes, you’re becoming even more active, I guess, but you’re still making some decisions to try to get a better return, but to me, it all goes back to the financial plan of, “What are you trying to do?”, I mean, because again, somebody that’s sitting there that’s 20 years old with a Roth IRA, bonds don’t play a part in that, but they’ve made a decision not to own bonds, so let’s just take the passive off the table and kind of steer the conversation towards, I would say being a little more selective and trying to figure out, “Do I just want to own the whole broad market or do I want to tweak it by trying to enhance it?”

Casey Keller:                      No. Absolutely. I think a good example of that would be fixed income, and if you look at just bonds, what was it … I will definitely 40 years ago, on the late ’70s, early ’80s, you could have … If your goal was to earn 10%, you could have just bought CDs and bonds and accomplished your goal.

You fast-forward to today, what CD rates or what, one and a half, 2% maybe if you’re lucky, to go, “If your goal is to get 5%, well, you know you have to do something different than just CD,” so that is a active decision to go, “What do I have to do?”

Karl Eggerss:                      Right. Right. Yeah, and the reason you make an active decision is because of what you’re trying to achieve, right? You don’t just blindly put a portfolio together, and I unfortunately, I think folks do watch TV, they read magazines, they get tips off the internet, and they build a portfolio based on that, and you kind of have to reverse engineer and kind of start with the end in mind first, and then make these tweaks to them, because we see them. We see portfolios all the time. Folks come in here, we look at their portfolio, and we say, “How did you put this together?”, and they say, “I don’t know.”

“I just, my uncle gave me this stock. I saw a bald-headed guy on TV, throwning stuffed animals at the screen, and he said that this stock was going to be great, so I bought some of that.” Yeah, you can’t do that. I think if you do well, the only way you probably do well over the long-term in that is if you get a big tailwind of a bull market that masks a lot of those errors that you probably are making.

Casey Keller:                      Right, and until it’s too late, I guess, but …

Karl Eggerss:                      Right.

Casey Keller:                      No. I think that’s a very good point that, that’s where planning comes into place, where you kind of look at a situation and go, “What do you need to earn to accomplish what you want to accomplish either in retirement or for saving for a college goal? How much do you need to save? What do you need to earn?” If that number is 5%, do you need a portfolio with a bunch of individual stocks that’s really aggressive?

Yet, maybe you could, but it may be taking undue risk and compromising the goals by, if the market goes the wrong direction. You may be taking on too much risk, so that’s where that planning comes in and trying to match the active bet you want to make if you will, to go back to that, yeah.

Karl Eggerss:                      Yeah. I think as opposed to calling it and labeling it active versus passive, or I’ve even have, I’ve heard people say, “Oh, I don’t like mutual funds,” or “I don’t like individual stocks,” I think you agree that we look at this as a big, old tool belt, right? It’s like going into Sears if you can find one, but what you used to do is go into Sears, and you’d go into the tool section and it’s like, “My gosh, look at all these tools,” that’s what the investing world’s like, and you go in there and you say, “I’m building something. I need this, this and this to build what I need to build.” That’s all this stuff is, are a bunch of tools, stocks, bonds, mutual funds, ETFs.

They all serve us purpose, so for us over the years, we’ve always used a lot of different tools because we’ve dealt with a lot of different people and a lot of different situations, so who cares if it’s active or passive? What’s the job we’re trying to do? Give me the right tool belt with the right tools in it, and we can get the job done.

Casey Keller:                      Yeah, so the tools you mentioned, Karl, each of those tools have their own unique characteristics.

Karl Eggerss:                      Right.

Casey Keller:                      Some tools, if you kind of look at every tool, we look at through the lens of either how much liquidity they have, how much safety they have, or how much growth they have, and because we know that no single tool has all three of those.

Karl Eggerss:                      Yeah.

Casey Keller:                      Meaning that-

Karl Eggerss:                      I wish they did, but I haven’t found one yet.

Casey Keller:                      Yeah, you know what? We’re still looking. You’re right. If we find [crosstalk 00:23:38]-

Karl Eggerss:                      Yeah. I mean, a rental house. You can’t just flip a switch and have that liquidated the next day. Whereas the stock, you can, but you probably aren’t going to wake up with a rental house worth 20% less, whereas a stock, you very well could, and you’re never going to make 15% in a year on a CD.

Casey Keller:                      Exactly.

Karl Eggerss:                      Maybe take out the 1970’s, but you’re probably not going to do that, but you have the safety aspect of it, so you’re right. The key is to blend those things together, so not only you have different tools, you have different characteristics of those tools, so let’s try to get away from active versus passive. It’s really, to me an irrelevant argument and it really doesn’t help anybody achieve their goals.

Casey Keller:                      Yes, I would agree with that.

Karl Eggerss:                      All right, everybody. Have a Merry Christmas, and we will see you next week back here on Creating Richer Lives, the podcast. Don’t forget, 210-526-0057 is our telephone number or Make sure you sign up for Covenant U. It’s our educational piece that goes out every Monday afternoon with all of the items we’ve put onto our website throughout the week, and nice, consolidated, one email per week.

All right, guys. Have a good weekend.

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On The Ride with Mac & Chad in Oklahoma City, Karl Eggerss was interviewed and discussed the power of inflation over time and the importance of investing for the long-term in order to outpace inflation.

Mac & Chad:                     Welcome back into The Ride, 95.3 FM, 1520 AM, we’re KOKC. Mac, Chad, producer Ryan, intern Jordan, and on the phone, Karl Eggerss. Karl’s from Well played, producer Ryan, with the music coming in.

Ryan:                                   I do what I can.

Mac & Chad:                     A little Pink Floyd there, because we are going to talk about finances. Karl is a senior wealth advisor and partner, but not only just finances, I love how we’re going to put it in perspective for the people like myself that, I don’t know how to play stocks, man. I don’t know any of that stuff, what it means. All I need to know is, how can I work towards making sure that everybody depends on me is financially set and taken care of? So hey, Karl, how you doing, man?

Karl Eggerss:                      Good, the term “play stocks,” that’s …

Mac & Chad:                     Oh, is that bad?

Karl Eggerss:                      Yeah, that’s bad. That’s bad. It’s investing, it’s investing.

Mac & Chad:                     Okay, well, I’m glad that you … We’ll start there, investing. How do you get someone who’s not familiar with it or doesn’t even know how to invest in the stocks? What kind of questions do they come to you and they ask?

Karl Eggerss:                      Well, I think just what you said. People sometimes think it’s gambling. And you have to realize, when you invest in stocks or mutual funds or exchange traded funds, which are baskets of stocks, you’re invested in companies. These are real companies, just like you would invest in your own company. And so how much profits do they have, and all of those types of things. But generally when people are starting out, whether it’s in a 401k, whether it’s just individually, probably starting with a basket for spreading the risk and diversifying is the best way to do it. And I would say nowadays there’s so much information available that, really, the listeners really need to just educate themselves first before they do anything. There’s always going to be something to invest in. And educating yourself first is the first thing you’ve got to do.

Mac & Chad:                     Right. Yeah, yeah, because if you’re going to do it then you’ve got to make sure you know what you’re doing. You definitely wouldn’t want me to take out a Sharpie and look at a newspaper and do it that way. Buy, sell, trade, hold. Yeah, no.

Speaker 4:                          You know, we’re seeing a lot of advertisements right now, too, for cryptocurrencies, that talk about cryptocurrency markets, that talk about different countries that are starting their own cryptos, or banks are going to start doing their own cryptos. What do you think about this whole cryptocurrency environment?

Karl Eggerss:                      You know, it reached its peak in late 2017, I think, early ’18. And I had literally friends of mine, and their kids, their high school kids were saying, “Hey, I’m trading cryptocurrencies, I’m making all this money,” and I thought, “This probably isn’t going to end well.” And sure enough, they fell about 90%, some of them are down 95%, 98%. And the idea behind cryptocurrencies, of getting away from countries being able to print their own money and devalue it, the idea of that and having a secure currency, is great. The problem, as you’ve seen, is that number one, it’s been used for a lot of fraudulent activity. Number two, there’re tons of them around, and most of them will fail. And number three, if you invested in, hypothetically, let’s say Bitcoin, you said, “That’s the one,” what’s to stop the government, any government, the US or any other government, from saying, “You know what, we’re going to just deem that illegal and we’re going to create our own.”

And so you’ve already seen other countries create their own.

Speaker 4:                          Right.

Karl Eggerss:                      And so it’s kind of an oversupply, not enough demand type of situation. But really the issue is, in a currency, when you keep your money in the bank, you’re invested in dollar bills, that’s what you’re investing in, and you trust that, yes, it moves a little, it can buy less or more, but when you take it out, you know that it’s going to be there. With a cryptocurrency that’s not the case. So for it to be called a currency, to me, is just way too early. Nobody’s going to put their money in a bank in cryptocurrencies, come back out and have it be down 30% or 40%. That’s crazy.

Speaker 4:                          That’s one thing I’ve kind of thought, is when I saw the [inaudible 00:03:59] cryptocurrencies, I don’t know what you do about wealth management, but I know a lot about government. And when they see billions or even trillions of dollars being moved around, they will get their hands on it. They’re not going to let that move around forever without getting their hand in it.

Karl Eggerss:                      Well, that’s why you’ve heard about, “Well, we should have one global currency.” That’s never going to happen, because countries use their own currency for their own benefit. So for example, if the US wants to really improve things, they depreciate their currency. They actually want it to go down, because it makes them more competitive. So countries manipulate their currencies all the time.

Speaker 4:                          China.

Karl Eggerss:                      Yeah, China. And you’re seeing that with the Euro. The Euro has been a disaster, because all these countries said, “Let’s just put it all together.” And what happens, in the European area you have good countries and bad countries, and the good ones are being mixed in with the bad. And so they really would prefer to have their own independent currencies again. And that’s why I don’t think we’ll ever have a global currency.

But that type of stuff is really complicated for most people listening. They’re sitting there going, “Wait, what does this all mean?” As an American, it means if you put your money in the bank, if you’re holding dollar bills, you’re still losing money every day, because the dollar depreciates very, very little. In other words, how much can you buy with that dollar bill?

Speaker 4:                          Right.

Karl Eggerss:                      And we know every day that goes by you can buy less and less. That’s called inflation. And that’s really, Mac, why you invest at all, is because you’re trying to keep your money somewhere, have it grow, and usually stocks will outperform that inflation, so that when you go get it later, you can buy more stuff with it later on. And unfortunately, when people are too conservative, thinking they’re being safe by keeping it in the bank, they actually end up falling behind a little bit and not really getting anywhere, because it’s not growing fast enough, frankly.

Mac & Chad:                     Gotcha. Our producer, Ryan, was telling me earlier he invested in MySpace, he’s going to buy stock in a thing called MySpace.

Ryan:                                   It’s in my top five.

Mac & Chad:                     Is it? Yeah, nice.

Ryan:                                   Top five.

Mac & Chad:                     Karl Eggerss-

Karl Eggerss:                      I want to know the other four.

Mac & Chad:                     Karl Eggerss from joins us. You know, I was thinking, here we are, of course, the holiday season. Everybody, in my opinion, man, you can look at the statistics, people spend way too much money on others for Christmas and all that stuff. But as you guys are sitting there talking about it, I was reading other statistics, that actually the population in the United States, there’s a surprising percentage that don’t use banks at all. And so I was thinking, what’s your info to somebody, they go, “Oh, I don’t use banks at all. I feel better with it Ziplocked and under my mattress.”

Karl Eggerss:                      Well, obviously a bank is supposed to be secure. 2008 kind of put a little pin in that theory, and they’re probably much more secure than they were before ’08, because the legislation and the rules have gotten even more strict. But you’re supposed to put it somewhere where you can earn a little bit of interest, right? And again, when you stick it on your mattress, you think that dollar bill is worth something, the same as when you pull it out a month later. If you go back and look from the 1800s until now, a dollar bill will buy you about a nickel’s worth of stuff, generally speaking. So it’s still a paper dollar bill that looks the same as it did 100 years ago. Unfortunately, it’s what can it buy?

And that’s why it’s kind of like being born in an escalator. You think the whole world’s moving, and it’s really you.

Mac & Chad:                     That’s funny.

Karl Eggerss:                      And same thing with a dollar bill. You’re sitting there holding a dollar, and you think, “This thing is going to be worth a dollar in a few years from now.” And it’s just not. Go look at a top-of-the-line truck back in the 1960s and tell me what you would have paid for it, and go look at a top-of-the-line truck in 2019. That’s inflation.

Speaker 4:                          Or let’s say today you’re making the median income in Oklahoma, and you don’t get a raise for 10 years. You won’t be making the median income in Oklahoma any more. You’ll be probably $10,000 behind.

Karl Eggerss:                      Exactly.

Mac & Chad:                     Right, right, yeah.

Karl Eggerss:                      Well, look, and we talked about it last week, people have not been getting raises for a long time. In the last few years they are starting to get raises again. You’re starting to see what’s called wage growth actually increasing a little bit. And that’s an awesome thing, because the listeners driving right now, you all are the ones that are moving the economy. It’s not the government. 70% of the economy is because of consumers and spending. They’re getting raises, they’re going to go spend it, or save it and invest it, but it helps the economy.

Mac & Chad:                     Hey, Karl, when you were talking about out how the dollar could actually do about a nickel’s worth, Chad was sitting here thinking, “Wait, when I was younger in high school, a dollar bought me about a dime’s worth.” All right, Karl Eggerss from Man, thank you so much for joining us again, brother. I look forward to talking to you, continuing on Wednesdays, and have a great holiday. Have a great Christmas, man.

Karl Eggerss:                      Hey, thanks, guys, take care.

Mac & Chad:                     You got it, brother, talk to you soon. All right, again, the website is Thanks again, Karl Eggerss.

By Justin Pawl, CFA, CAIA

In this week’s edition:

  • Last Week Today. Answers to many questions weighing on the market.
  • Holiday PSA. Scams via gift cards are on the rise.
  • Fed 4.0. The Fed will formally review its approach to monetary policy next year, and the implications are significant.
  • Philanthropy.  I don’t expand on this below, but I want to recognize my colleagues for their significant efforts in our communities. Last week, Covenant was one of twenty firms selected for the Invest in Others Charitable Foundation’s 2019 Charitable Champions List. If you want to learn more about the award, click here. Well done team!

Last Week Today. A week of answers:

  • Will the House approve the USMCA trade deal with Mexico and Canada (aka NAFTA 2.0)? Yes, confirmed Tuesday.
  • Will the Fed keep interest rates low? Yes, confirmed Wednesday.
  • Will the European Central Bank maintain an easy monetary policy? Yes, confirmed Thursday.
  • Will the U.S. and China agree to a Phase I trade deal? Yes, confirmed Friday.
  • Will the House impeach President Trump? Yes, confirmed Friday.
  • Will the UK leave the European Union? Yes, confirmed Friday.

As answers to critical questions came into focus last week, the S&P 500 and Nasdaq indices hit record highs giving credence to the Wall Street axiom that markets hate uncertainty. Less uncertainty = higher asset prices. Another popular Wall Street saying is that markets like to climb a wall of worry. With lifting uncertainty last week, one could ask what is there left to worry about?

The age-old debate on valuation is certainly one remaining worry. The S&P 500’s YTD gain of 26% this year is not the result of strong earnings growth. Instead, approximately 90% of the rise is attributable to the expansion of the Price/Earnings (“P/E”) multiple. The Forward P/E multiple on the S&P 500 is close to 18x (vs. the 25-year average of 16.24x), and the cyclically adjusted Shiller P/E multiple is 30.0 (vs. the 25-year average of 27.1). As the founder of Universa investments, Mark Spitznagel, remarked last week, “The market has become untethered from the economic fundamentals.” In these types of situations, it’s as if the law of gravity governing market valuations is temporarily suspended. “This doesn’t mean the market will crash in the short term… momentum could just as easily cause it to rise even higher.” Historically low global interest rates certainly support above-average valuation multiples. But, meaningful additional gains in the market will require better earnings growth than we saw in 2019.

For more detail on weekly, MTD, and YTD financial market performance, click on the table below.



Holiday PSA. “Hi, this is Justin. Can you help me? I’m in Vegas, and I’ve been in a car accident! Please don’t tell Michelle, but I’ve been arrested, and I need money to pay bail.” This is a true story, except it wasn’t me on the phone, it was someone impersonating me (who also said “I” had broken my nose in the accident, to cover for a different sounding voice). The call was to my wife’s parents in California. This type of scam is increasingly common and, sadly, highly effective. Typically, the scammers will request that the person on the other end of the line purchase gift cards from a store such as Walmart or Target. Once the gift cards are purchased, the scammers ask for the numeric code on the back, which they use to make purchases immediately and anonymously.


Source: Federal Trade Commission

Thankfully, my in-laws didn’t fall for the scam. They eventually reached me at work in San Antonio, and the thieves were thwarted, but that’s not the case for many, many victims. As the chart above highlights, these types of scams are occurring more frequently. Indeed, the amount of money lost in scams through the third quarter of this year is nearly equal to the total amount lost in all of 2018. In 2015, theft via gift card was only about 7% of reported scams, but that number has more than quadrupled to 33% this year.

Moreover, it’s not just family relationships who are targeted; these types of scams also occur in the workplace. The scammers research a company and then send an email from “the boss” to someone at the firm requesting they purchase retail gift cards for clients. Credit on retail gift cards can not only be spent anonymously but recovering the lost funds is nearly impossible.

If there’s any good news from this rising trend, it’s that the popularity of the scam is bringing increasing awareness. And when it comes to not being taken by the scammers, a few basic rules of thumb can save you and your loved ones a lot of money:

  • Confirm the caller. If someone calls claiming to be a relative or friend and in need of money, hang up and call that person directly. NEVER fall for the “don’t tell so-and-so” bit. If you can’t reach the person that called, try a close friend or relative to verify the situation. Patience is key, so wait to hear back from a known phone number.
  • Fishy calls. There’s not a legitimate business, tech-support service, government, or law enforcement agency that will accept payment in the form of gift cards. If you receive a call requesting payment over the phone, your suspicions should be high, and if they require payment via gift card, just hang up.
  • Verify the email. Like the fishy phone calls, emails requesting you purchase gift cards should be viewed skeptically. If you receive one, check the email address carefully to ensure it is coming from who purportedly sent the message. Preferably check it from a computer, as email addresses are often truncated on smartphones making it more challenging to identify who is sending the message. It’s worth spending a little extra time to call the person and verify the request as scammers are very good at ‘spoofing,’ masking a fake email address with one that looks legitimate.

Fed 4.0. Next year the Federal Reserve will undertake a formal monetary policy review in an attempt to understand the impact of monetary policy on the economy better. As FHN Financial points out, we are likely entering the fourth era of Fed monetary policy:

  • 1946 to 1978.  Fed pursues maximum employment  inflation and interest rates rise.
  • 1978 to 2012.  Fed pursues lower inflation  inflation and interest rates fall.
  • 2012 to 2019.  Fed pursues 2%, stable inflation using outdated models inflation and interest rates are stable but too low.
  • 2020 to ?.  Fed adjusts policy to target inflation averaging 2% instead of 1.50-1.75% → inflation and interest rates should be stable, but the range should be 0.25% – 0.50% higher.


Why now? Up until recently, economists at the Fed have blamed demographics, slowing productivity growth, and globalization for the steady decline in the equilibrium interest rate. Known as “r-star,” the equilibrium interest rate is the interest rate at which the economy can maintain both full employment and stable inflation. However, research by the Fed’s staff suggests the Fed’s approach to monetary policy is outdated and may be responsible for inflation levels consistently falling short of the 2% inflation target.

Keep in mind that the equilibrium interest rate cannot be precisely measured, only estimated. The staff’s theory is that the Fed’s reliance on traditional economic models, in a period of declining r-star, has consistently pushed the Fed to raise rates higher than necessary (the December 2018 interest rate hike is a recent and striking example). As a result, inflation has remained below the 2% target since the Financial Crisis.

We’ve written about this before, but transitioning monetary policy from the recent era of treating 2% inflation as a ceiling to using 2% as an average target is a big deal. If the Fed adopts this “symmetrical inflation goal” approach, they will be less reactive to inflation approaching or even exceeding 2% for a time when inflation has been below 2% (like it has been for the last ten years). What this means is that the Fed will be reticent to raise interest rates unless there is a clear and present danger of inflation rising significantly above 2%. Thus, interest rates will remain low for even longer, which is essentially what the Fed reiterated at their meeting last week.

Be well,


Karl Eggerss was interviewed on CBS by Sharon Ko discussing the correct amount of time everyone should be spending on their finances.

Sharon Ko:                         This morning, consider how much time you spend on your finances. Here’s how much attention you should be giving to manage your money.

How much time does the average person spend on their finances?

Karl Eggerss:                      Well, according to the, only about 3% of Americans even spend any time, intentional time, on their finances. But the ones that do spend intentional time on their finances, they spend about an hour a day. And you know, I don’t think there’s people watching that are going, “Wow, I don’t spend that,” or, “I spend two hours a day.” I don’t think there’s a right or wrong. I think the key though is are you passionate about this? Is this something you enjoy doing? Because if you don’t, then maybe you shouldn’t be spending two hours a day or an hour a day on your finances. But I think the key is to automate as much as possible. With technology the way it is today, with apps, with software and websites, we really should automate as much as possible so that we’re not having to spend that much time doing it.

But one other interesting stat is they say that people spend about 100 times as much time binge watching on TV than they do on their personal finances. And I think the key is you have to have some intentionality, right? You have to pay attention to it, otherwise the money’s going to leak out somewhere. And so whether it’s budgeting or assessing your allocation if you have investments, those are things you have to have intentionality. Otherwise, you’re not going to have any type of strategy or any type of plan. And so whether it’s 30 minutes for you or an hour a week, whatever it is, you might want to put that in your schedule so you do have some regularity with that.

Sharon Ko:                         Are there some areas to focus on, some main areas to focus on when you are spending time on your finances?

Karl Eggerss:                      I think budgeting is probably the biggest one. You know, what is coming in the door, what’s going out. If you don’t know that and you don’t have a handle on it, then you’re never going to get to where you need to go. I mean, if you really know, “I’ve got X dollars leftover at the end of the week,” every paycheck every month, then you can figure out, “Okay. When that happens, I have to have a plan of where that’s going to go in terms of saving or paying down debt.” If you don’t do that, it’s just going to get spent. There’s a lot of things out there that we can spend our money on, and if we don’t have a plan for where that money is going to go, it will get spent.


On this week’s show, Karl discusses all the positive news that lifted stocks to new highs.  But, is it all baked in?

Hey, good morning everybody. Welcome to the podcast. Thanks for joining me. Karl Eggerss here on Creating Richer Lives, the podcast version, and I say that because we have a website called Creating Richer Lives as well, just Tons of stuff on there. Before you go there, if you just want to bypass all of that and give us a call, you can certainly do that, 210-526-0057, but if you do go to, you’re going to notice a couple of things.

Of course, we put a lot of information regarding your finances, but Creating Richer Lives is also about the lifestyle that you want, the legacy you want to leave, philanthropy, which is what you want to give away to charity, and I have to give a shout out to Covenant mainly because I wasn’t just me. It’s a whole team of people, but Covenant did earn a National Recognition for Leadership in Corporate Philanthropy, so not only do we help clients with philanthropy, we also do it ourselves. That’s really what Covenant was founded on. There was 20 financial advisory firms around the country nationally that were nominated and selected for this 2019 Charitable Champions List, and it’s from an organization called Invest in Others, and really awesome stuff. I mean, you can go on the website.

We have the article on there. There’s a press release regarding it, and so we’re just proud to be a part of that group, and so shout out to all my fellow Covenant teammates. This podcast is brought to you by the aforementioned Covenant Lifestyle. Legacy. Philanthropy., just like we talked about. All right. Again, 210-526-0057.

All right. Let’s jump right in. By the way, not only will you find that article about philanthropy on our website in, but you’re also going to see kind of a fun article that we put up there a few days ago from one of our wealth advisors, Terry Langston, and it’s called Elevating Your Holiday Wine Game. Essentially, it’s a whole tutorial, if you will, on really when you’re hosting a party to not only just have some wines, but make it an event. We kind of go through some cool, little tips on there and it’s a pretty economical way to do it, and really, as all the holiday parties are kicking off here the next several weeks, we thought it’d be helpful to put that up there in front, so go check that out,, Elevating Your Holiday Wine Game.

All right. Well, this was a really busy week in the markets, and some weeks are not. Some weeks are, there’s a lot of movement, but not a lot of reason for it, not a lot of news events. This was a very, heavy news-oriented week. Now, that doesn’t always mean that you do something about it.

We’re clear on this podcast regarding that, but we do try to filter out what’s noise, what’s not, so let’s run through just kind of what did move the markets this week because it was a really, really busy week, and generally a positive tone, risk-on tone to the markets, so this whole week was about not only trade, but a big portion of it was trade. Monday, we come out, and China came out and said, “Yeah, we hope that we can reach a trade agreement as soon as possible.” Reuters said that, and of course, the Dow still finished down about 100 points, and then, of course Tuesday morning, we had, Futures were still down about 100 points, and then a report came out saying, “The U.S. might delay the tariffs.” Here we go again, but kind of piled on that was that we were going to get this United States, Mexico, Canada agreement, was scheduled to be signed. That was kind of another bullish headline coming out, but it was kind of still a mixed day overall.

Then, we heard from the fed this week, and what was interesting was the fed, of course didn’t raise or lower interest rates. They’ve lowered them three times in 2019, but they essentially said, “We’re not going to raise them in 2020 either.” Now, the markets celebrated that, but let’s remember that the fed’s track record here is not that great, right? Take it with a grain of salt, but it was something that certainly got the markets going. Look, remember, I said this last week and I’ll say it again, the shift a year ago, three rate hikes were scheduled in 2019.

Three, and yet, there was three cuts, a huge change of direction for the federal reserve, and you can just point right to why the markets struggled late last year. Not only the tariffs, but the fed tightening and a slowing economy move into 2019, and they start cutting in a slowing economy, and now, it seems like the economy is at least mixed signals, but they’re still on the sidelines and they’ve cut three times, hence, good market gains for this year. Thursday, we had some producer price index came out. A little weaker. Initial jobless claims went up.

That was something we need to watch, and then I’ll get to that in just a minute, but Trump, of course tweeted, “We got a big trade deal coming soon,” and the Dow popped 200 points. Look, at the end of the day, all of the stuff coming out with the tariffs, we got this agreement on Friday, and the market was kind of all over the place. Is it a buy the rumor, sell the news? Here’s what we do know. Housing price is at an all-time high. Stock market’s at an all-time high.

We got this economic expansion the longest in history, we’ve got a pretty good jobs market, and we got the fed that cut rates as I said, and some would argue they’re doing quantitative easing again. Remember, their balance sheet was shrinking. It’s going up again. For those out there that say, “Look, what the fed does matters,” it does, not only with the direction of interest rates, but what they do to inject or pull money out of the system, and they have put money into the system at a pretty big clip, something like $300 billion in the last few months, so all those things are big tailwinds, and then you throw on top of that the China trade deal, whether it’s partial or not, phase one, and the Mexico, Canada and United States agreement, and that’s risk-on. I mean, that is, you really can’t get a better scenario than that.

Now, what we have to watch out for, and we saw a weak retail sales number on Friday, is this a precursor, because remember, we have unemployment … The claims spiked up. Initial jobless claims comes out weekly. It spiked up a little bit, so you put that on the back of weaker retail sales, which is a bouncy number, but you put it on top of that and you say to yourself, “Uh-oh, as the consumer, is this the tipping point where the consumer is going to start struggling?”, which is still 70% of our economy as I remind you, because if that’s the case, do we have to worry about spending going down, at the same time, maybe we start to see some inflation perking up? I mean, there’s a lot of people seeing that. We may start to get that.

Who knows? I mean, the producer price index was weaker. That’s an inflation number. It was weaker, but there are some that are starting to see some little, green shoots of inflation, and if that happens at the same time, the consumer reins in. Not a good combination, but too early to tell.

I mean, again, all those things that I told you about that have happened this week is a recipe for gains, and that’s what we’re seeing. Where we are in terms of what kind of did the best this week, obviously, things that benefited from some of these trade agreements, Mexican stocks, but we even had semiconductors, which have had just a phenomenal year, up over 60% year-to-date for semiconductors, and boy, that’s a hard chart to buy if you’re looking to buy that, but we saw semiconductors up over 4% this week. Gold, miners, silver, all of that was up. High-beta banking stocks were up. A pretty good week overall.

Not a huge week for this, the general stock market, but certainly, some specific areas, especially things like emerging markets, which still bullish on. I’m personally bullish on emerging markets. Up over 3% this week. Not a bad week, and you’re seeing oil and gas stocks do very well also, beaten up considerably in some of those areas. What got hit? Real estate investment trusts were down.

Natural gas stocks just look horrible, I mean in terms of new lows, natural gas prices just plummeting down. Aerospace and defense was weak, and if you owned volatility, I mean the VIX … Remember the VIX last Christmas spiking up? It is now down 50% year-to-date, so a big, big drop if you believed. Listen, you have a lot of people on TV, podcasts, whatever saying, “The VIX is cheap. Buy it, buy it.”

That is a true statement. How much you own, you can get bit. People thought it was cheap a few months ago and it’s continued to get cheaper and cheaper, so the VIX down over 50% year-to-date. Now, you know, last week we talked about kind of some year-end tax strategies and things you can do. Still have time to do those. I would encourage you though, run a mock scenario for next year or this year.

In other words, if you gift next year versus this year, if you make that IRA contribution or you max out your 401(k) or don’t, there are ways to kind of do a proforma, if you will on your own taxes. If your CPA isn’t doing that, give us a call, 210-526-0057. See if that’s something we can help you with, because oftentimes, running those scenarios is really helpful to do in-depth financial planning. Without that, sometimes you’re missing some things. In other words, a lot of people right now are not able to take advantage of deductions when they give to charity.

There are ways to maybe, in different structures, to do a lot of charitable giving upfront and kind of front-end load it, if you will into different entities, and then be able to give to those charities later on. There’s different tactics and ways to do that. Again, I would encourage you, go back and listen to last week’s episode with some practical things you can do, but it’s not too late. We still have a couple of weeks, two, three weeks left in this year, and you need to decide what things you’re going to do now, versus next year. Now, before we wrap up this podcast, I did want to say Time Magazine has their person of the year each year, and regardless of if you think the person on there this year should be on there or not, let me just say that my persons of the year are first responders, teachers, anyone in the military, really any medical professional.

Those are people that to me that are underappreciated, and in various ways get attacked, are leaving the professions that they’re in sometimes, and I just want to say kudos to them, and really, they’re my persons of the year every year, so just want to give a shout out to them. Have a wonderful weekend, everybody. Take care. We’ll see you next week here on Creating Richer Lives.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, including the investments and/or investment strategies recommended or undertaken by Covenant Multifamily Offices, LLC, Covenant, or any non-investment related content will be profitable, equal any corresponding indicated historical performance levels be suitable for your portfolio or individual situation, or prove successful. Moreover, you should not assume that any discussion or information serves as the receipt of, or as a substitute for personalized investment advice from Covenant. To the extent that a listener has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with a professional advisor of his/her choosing. Covenant is neither a law firm, nor a certified public accounting firm, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of our current written disclosure brochure, discussing our advisory services and fees is available upon request or at