Written by David Young, President & Founder of Paragon Wealth Management
The markets have been strong the past few years — and they have been exceptionally strong since Donald Trump was elected. Most of the strength was based on investor expectations. Specifically, that Trump’s free market policies and tax reform would benefit stock prices. As a result, last year the markets were up 10 to 20 percent depending on the market. Volatility was almost nonexistent.
The broad market hit a peak on Jan. 26, 2018. Since then, volatility has picked up significantly and the market has been acting more like its old self. Three issues are currently pushing it around.
First, valuations have been at the upper end of fair value for some time. Whenever valuations get this high, investors start looking for reasons to sell rather than buy. They tend to look at everything through a negative lens.
Second, Trump has been pushing a protectionist trade agenda and recently announced tariffs against China. Investors do not like tariffs. Throughout history, tariffs have always caused more harm than good. Every time tariff news comes out, the market sells off.
Third, tech stocks (specifically the FANG stocks, i.e. Facebook, Apple, Netflix, Google and Amazon) have been leading the market up for the last 18 months. But recently, they have had more than their share of bad news, which is causing them to put a downward pressure on the market.
Overall, excellent market fundamentals are still in place, which forces us to stay invested. However, with interest rates slowly rising, we are on “high alert” more than we have been in some time.
CHANGES AT PARAGON
If When I founded Paragon 32 years ago, it was because I couldn’t find a fiduciary firm that managed my money the way I wanted.
I had sold several businesses and needed a place to invest my hard-earned money. I met with Shearson Lehman, Smith Barney, Merrill Lynch and Northwestern Mutual, to name just a few. None fit the bill.
I wanted them to invest my money as if it were their own. I wanted to cut unnecessary investment costs wherever possible. I wanted a proactive investment manager who would adjust my account depending on whether the markets were going up, down, or sideways. I didn’t want them to passively buy an investment, hold it forever, and pray it worked out.
When I started Paragon, I was trading through Fidelity Investments. Each of my clients had to sign a limited power of attorney so I could trade their accounts. We called in our trades on land phone lines, one by one, because there was no internet.
After a few years, Charles Schwab became the leader in the newly developed RIA industry. They were at the cutting edge. We moved from Fidelity to Charles Schwab, because Schwab allowed us to provide the best technology and lowest costs to our clients.
We have been at Charles Schwab for almost 25 years and have enjoyed that working relationship. However, after an in-depth review, it is time for a change. Looking to the future, we believe making some significant changes will provide our clients with a better technology platform, lower transaction costs and outstanding client service.
We did not make this decision lightly. Moving 330+ accounts and upgrading multiple technology platforms is not my idea of a good time.
But change is always painful … in the short term. We are doing this because it will allow us to better serve you and provide you with the best technology available to trade and monitor your accounts.
TD Ameritrade is at the forefront of technology in the Registered Investment Advisor space. TD Ameritrade is a leader in trade execution. We have negotiated trade pricing that is either the same or one-fourth the cost of what we were paying, depending on the account. Better trade execution and lower costs ultimately lead to better investment results.
Safety and security of the accounts is of the utmost importance. TD Ameritrade is committed to delivering one of the highest levels of security in the industry and carries FDIC, SIPC and additional insurance against fraud up to $152 million per client.
In conjunction with moving to TD Ameritrade, we will also be implementing a new portfolio administration package from the industry leader, Orion. The Orion platform will cost Paragon five times more annually than our current provider, but that cost will not be passed on to our clients. Your costs will go down while ours go up. We believe you are worth it.
In addition to enhanced trade order management, cost basis, tax reporting, compliance, and RMD distributions, this state-of-the-art Orion platform will provide you with an incredible array of tools.
Each client will have an online portal, which will provide them with immediate access to accounts and performance across multiple timeframes. We will build these reports for you, as simple or as complicated as you desire. We will use an aggregator, which will allow you to view any of your bank accounts, or other financial accounts that are outside of Paragon. You will have immediate access to your accounts and a variety of reports via your smartphone, computer or through the mail — whichever you prefer.
In an effort to provide you with the best client service, we will also be upgrading our client contact software. This industry-leading client software, known as “Wealthbox,” will allow our staff to take your already excellent service experience to the next level.
Finally, we are significantly upgrading our Financial Planning Software. The state-of-the-art software will make it easier to build and update your plan online. Your plans will be updated daily since they pull in the data data directly from your investment accounts. They will also be available online through your portal. Whether it is a Retirement Income plan, a tax estimate, a Roth Conversion, or Social Security Optimization, our hope is to make it easy for you to understand your plan, access it and update it as needed.
Our ultimate goal is to provide you with the VERY BEST in the Investment Advisor space. We are excited with these enhancements, and over the coming months, we will reach out to you as we get everything put in place.
Disclaimer: 1. Investment performance reflects time-weighted, size-weighted geometric composite returns of actual client accounts. 2. Investment returns are net of all management fees and transaction costs, and reflect the reinvestment of all dividends and distributions. 3. The S&P Index is a market-value weighted index comprised of 500 stocks selected for market size, liquidity, and industry group representation The Barclays Aggregate Bond Index is a benchmark index made up of the Barclays Government/Corporate Bond Index. 4. Benchmarks are used for comparative purposes only. The Paragon Top Flight Portfolio is not designed to track the S&P Index and will have results different from the benchmark. The Paragon Managed Income Portfolio is not designed to track the Barclays Bond Aggregate Index. 5. Past performance is no guarantee of future results. Investments in securities involve the risk of loss. Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.
Some of you may or may not know a lot about Dave’s wife Cathy. Cathy has a big heart and is willing to go the extra mile to make sure a job gets done right. Together, they have five children and eight grandchildren.
Ten years ago, their son in law, Byron Edwards passed away unexpectedly. In his memory, Cathy decided to decorate and donate a Christmas tree to the Festival of Trees in Salt Lake.
Then, three years later, their oldest grandson Jack was born with some major medical complications. The doctors only gave him a 10% chance of survival. He was in the intensive care unit at Primary Children’s Hospital for almost four months. The nurses and doctors at Primary Children’s did an excellent job and saved his life. He is now fully recovered and a healthy, happy, seven year old boy.
In memory of Byron and as an expression of their gratitude for what Primary Children’s Hospital did for Jack, every year Cathy teams up with a couple of close friends and decorates a tree. The tree is then donated to the Festival of Trees which raises money for the Primary Children’s Hospital in Salt Lake City. She has found great pleasure in doing this as a way to pay it forward to other families who use the services of Primary Children’s Hospital.
This year, Cathy and her team decorated the tree with snowmen along with a lot of beautiful and fun ornaments. The tree was auctioned off and sold for $5,000.00. She was very happy that she and her team could raise that much for the Primary Children’s Hospital.
Enjoy scrolling through the pictures of the tree! The tree is beautiful!!!!
Disclaimer Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.
It is with a heavy heart that I announce my departure from Paragon Wealth Management. I have thoroughly enjoyed my time with Paragon.
During my tenure at Paragon Wealth Management, we have enjoyed many successes and achieved numerous milestones. I have garnered friendships within the organization that will last a lifetime. One of the highlights that has resonated with me here at Paragon is having the opportunity to work with the Live Your Dream Foundation and having a viable role in helping single mothers obtain an education.
I have also enjoyed working with Katie Bunnell, the Board Members and volunteers on the Raft and Run event which produced $50,000 in scholarship funds to help those in need of an education. I will continue to be involved as an Advisory Board Member on the Live Your Dream Foundation and look forward to upcoming events such as the upcoming annual Live Your Dream Foundation Golf Tournament in June 16th and the Raft and Run on Pioneer Day.
I have thoroughly been blessed to have been a part of such a wonderful team here at Paragon for the last 2 ½ years. I have gained valuable experience during my tenure at Paragon. I look forward to the next chapter in my career and will miss the smiling faces that greeted me here each day.
I wish the team at Paragon Wealth Management continued success!
The Second annual Raft and Run – started by Paragon Wealth Management in Provo – raised more then $40, 000 at its event this past Pioneer Day.
All Proceeds from the five-mile raft and 5k road race go to the Live Your Dream Scholarship Foundation, which helps single mothers in difficult situations pursue their education. The money raised at the event will provide at least 14 scholarships to single moms in need.
“Pioneer Day Raft and Run” Triples Live Your Dream Foundation’s College Scholarship Awards in 2014-2015
Annual Event Gives Single Utah Moms College Hope
PROVO, Utah—May 28, 2014–In its second year, The Pioneer Day Raft and Run will give more single moms a chance of achieving their college dreams if Paragon Wealth Management Founder and President and Live Your Dream Foundation visionary Dave Young continues to have his way. On the July 24th Pioneer Day holiday, charity event sponsor Paragon Wealth Management along with other Utah-based corporate and non-profit sponsors invite Utah families and individuals who love the outdoors to join in the fun and register to participate in this event that combines the excitement of a five-mile raft float with a 5k fun run.
To showcase the program’s success with its scholarship recipients, the Live Your Dream Foundation produced a video to share the quality of life stories already achieved in just the past few years.
Inspired by Young’s daughter Katie Bunnell, whose husband’s passing left her to provide for their three-month-old daughter, the “Live Your Dream” scholarship helps single mothers in difficult situations pursue a college education. The scholarship awards up to $2,000 per individual applicant and can be used for tuition at any Utah university or college. Due to an increase in demand and support from sponsors, the Live Your Dream Foundation decided to add a few more scholarships for 2014-2015; the deadline for new scholarship applications is July 18, 2014.
The 2nd Annual Pioneer Day Raft and Run begins at Canyon Glen Park where participants load on buses for transportation to the race start, beginning with a raft trip on the Provo River to Vivian Park. Once the raft docks, each team member will be timed to the finish of the 5k run at Canyon Glen Park. To learn more about the event, prizes, and to register, visit www.raftandrun.com.
Thank you for being a loyal reader of Money Managers Live. We have been posting articles and videos weekly for three years now. We hope the information has been useful. If you would like to recommend a topic for 2011, please leave a comment. We’d love to hear from you.
We wish you the best for the upcoming year. Happy New Year 2011!
The Paragon Team
(Dave, Nathan, Ryan, Trudy, Elizabeth & Shannon)
Paragon Wealth Management was
notified today that they will be included in the National Association of
Board Certified Advisory Practices (NABCAP) Premier Advisors list in
the November issue of Utah Business Magazine.
“We feel privileged to be included on this list,” said Nathan White,
Paragon’s Chief Investment Officer. “It is an honor to be recognized
among these firms.”
NABCAP is a non-profit 501(c)(3) organization that selects an
exclusive group of advisory firms each year who represent the best in
quality wealth management. They are the first organization to create a
discerning process to help the top quality advisory practices in order
to better serve the investing community.
“One thing that sets us apart from other investment firms is our
unique investment strategy,” said Elizabeth Michalek, Paragon’s Director
of Client Services. “Our wealth managers use quantitative models, which
allow them to act in our clients’ best interest. It removes emotion and
Management is a provider of managed portfolios for individuals and
institutions. Although the information included in this report has been
obtained from other sources Paragon believes this to be reliable, we do
not guarantee its accuracy. All opinions and estimates included in this
report constitute the judgment as of the dates indicated and are subject
to change without notice. This report is for informational purposes
only and is not intended as an offer or solicitation with respect to the
purchase or sale of any security. Past performance is not a guarantee
of future results.
Thank you to everyone who came to Paragon’s Appreciation Gala last Saturday, September 11 at the Tuscany Resturant in Salt Lake City. We enjoyed excellent food, wonderful weather and great music by Ashley Wood.
We also awarded our first two Live Your Dream Scholarships that night to two single mothers. We planned to give one full-tuition scholarship this year, but were able to give two. Visit the link above to learn more about the scholarship.
We hosted a silent auction that night to raise more money for the Live Your Dream Scholarship. 50 different items were donated by companies such as Thanksgiving Point, RC Willey, Forget-me-Knots, Young Living Essential Oils, Stampin Up!, Steve Young, The Utah Jazz, East Bay Golf Course, and many more. Two of the highlighted items were a five night stay in Cabo San Lucas and a seven night stay in Hawaii. Thank you to all of our wonderful donors!
When people find out I am in the investment business, they usually ask me where they should invest. They ask if it is better to be in stocks, bonds or real estate. They want hot tips like, are U.S. stocks better than international stocks? What about China and Brazil? Etc., etc.
Next, they tell me their horrible investment experiences. Typically, they are convinced that anything they invest in is destined for doom. This leads me to ask, “Why do the majority of investors have bad experiences?”
It doesn’t help that for the past 10 years, the stock market and real estate markets haven’t gone anywhere. After mostly going up during the ’80s and ’90s, the markets went down hard between 2000 and 2002. From 2003 through 2007, they did great. But, what came in 2008 to early 2009 was one of the worst bear markets in history, after which the markets rallied once again.
It’s understandable investors have had it tough. However, studies have shown that the average investor did poorly during the good times, too. Historically, retail investors have underperformed horribly when markets are bad. No wonder investors are frustrated and disillusioned.
So, are people hard wired to invest in the wrong place at the wrong time? Yes. And I’ll tell you why: emotions. Most investors invest based on emotions, driven by a constant tug of war between fear and greed.
Will Rogers said investing is simple: All you do is buy low and sell high. The problem is when prices are low, everyone is consumed with FEAR. And when people are afraid to invest, prices plummet.
The other side of the cycle is when markets have gone up. Investors tell their friends about the 20 percent return they got last year, and all of a sudden the 1.5 percent they got in their CD doesn’t look so great. So then they, along with millions of other investors, come piling into the market consumed with GREED.
This cycle of fear and greed repeats itself over and over. Consider where the masses invested the past 10 years. Back in 2000, record numbers flooded the stock market right before a horrible three-year bear market hit. Investors in the NASDAQ watched their accounts lose 80 percent of their value.
Many of those investors said they would never invest in stocks again. So they piled into real estate to be safe. As we saw in 2008, it wasn’t safe after all. Depending on which part of the country they were in, they experienced losses anywhere between 30 and 80 percent. Some leveraged real estate investors wiped out completely.
For the past year, we’ve seen investors piling into bonds. Bonds have been pushed to the lowest yields I’ve seen — simply because everyone is buying them “to be safe.” The bond bubble looks a lot like the previous stock and real estate bubbles. Odds are that investors who buy bonds for safety are about to get crushed.
At Paragon Wealth Management, we avoid emotional investing by following our quantitative models. We do not care what the media is saying or what we hope or how we feel. Our models process the market data and we invest accordingly. We constantly adjust our portfolios to what the market is actually doing.
Paragon Wealth Management is a provider of managed portfolios for individuals and institutions. Although the information included in this report has been obtained from sources Paragon believes to be reliable, we do not guarantee its accuracy. All opinions and estimates included in this report constitute the judgment as of the dates indicated and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.