High Gear for February 2, 2015 reported by Suzanne Juptner

Invocation:                         Dick Gregory. Surprisingly, this was Dick’s first ever invocation after being a member since 1997, more or less… He spoke about health care being a collaborative community effort and being mindful of our spirituality. Our table agreed that Dick was very good at giving the invocation and that he should do it again – certainly before another 18 years go by!

Carol Bullock from Burlingame South; John from the SF Club (didn’t catch the last name – sorry); Jim Karel, our speaker today; and Trisha Palermo and Flavio Silva from Atria, first time visitors. We hope to see both of you again soon!

 

Jim Shypertt announced the sad news that Jay Plank’s sister passed away.

 

Minor, David and the wonderful Hilton crew were acknowledged for all their efforts in making our Monday meetings go so smoothly week after week. We appreciate all you do – thank you so much!

The football pool results were announced and the big winner was….. Burlingame Rotary. Turns out our football pool scores mirrored the crazy Super Bowl game scores we saw on Sunday. We had one member winner and it was for the 1^st quarter score: congratulations to Mark Johnson.

Save the date for our next fundraiser - it’s a Kentucky Derby Party on Saturday, May 2^nd from 1 pm to 4 pm. Joy Huetteman showed us a video of the 2014 race and gave further details about our fundraiser that will take place at the National Center for Equine Facilitated Therapy (NCET) in Woodside near 280.  Bottom line, it will be loads of fun with music, auctions, awards, food and drink. Dave Behling pointed out that an additional bonus is that there is an amazing art exhibit near NCET that is usually not open to the public, but that we will be able to see. So at our next club meeting, grab some flyers and/or postcards, invite your friends, and help get the word out!

Note there is no meeting week after next, February 16^th since it is President’s Day.

 

Jim Karel, Managing Principal at Silicon Valley Wealth Advisors (SVWA), presented his Investment Outlook for 2015, an encore and update to the presentation he gave to our club last year. SVWA’s focus is portfolio management and financial planning, and Jim provided his views on both for the upcoming year. Jim said people should conceptually think about their portfolios as “buckets of dollars” over 0-5 years, 5-15 years, and > 15 years to ensure they have the proper asset allocations tied to risk/reward within those time frames. Quantitative easing (keeping interest rates low) is still happening globally and is valued at $7 trillion, with the US, EU, UK, and Japan making up the lion’s share. Central Banks have become ever more powerful since they hold the debt required to finance their country’s growth. The simplistic idea is that growth will increase in these countries before the bonds are due. The inherent risk is that this has never been tried before, making it the greatest experiment in modern finance. It also makes the Central Banks extremely powerful. Jim pointed out what has fundamentally changed since the financial crisis of 2008 is that a new global platform was established and that the US is part of this global unit, as evidenced by 45% of the US GDP coming from outside the US.  What we have seen in the US financial markets over the past 6 years is interest rates steadily declining (and staying low), which fueled the equity markets. We are approaching the latter stage of a bull market, meaning equities are now expensive and the same level of growth is unlikely for an extended time. What to consider investment-wise in 2015? Jim spoke to 5 investment themes that should be considered: 1) Floating rate investments, 2) Equities, specifically mega caps, 3) Healthcare, specifically biotech and medical devices since they are non-cyclical in nature, 4) Precious Metals, albeit this is not for everyone and need to be dollar cost averaged, and 5) Energy, which may have value opportunities given the recent sector downturn. The presentation concluded with an excellent Q&A session, including why inflation will likely stay flat for the immediate short-term; why index funds tend to be volatile in the short-term and why sector opportunities within index funds are difficult; why China is still a major player and growing; and why Greece and Spain will prompt EU change and that the EU will be different. The concluding note is that the US is still King of financial markets (or Queen, depending on your perspective).