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The Optivest Blog

It has been a very busy and productive first quarter at Optivest:  asset allocation and manager changes with SageView, a breakfast meeting with Mohamed El-Erian (departing CEO at PIMCO), interviews with the Wall Street Journal and Forbes, high level real estate discussions with large local owners including Rick Caruso, launching a Retirement Strategies department, joining Tiger 21 and meeting with 8 New York investment bankers conducting due diligence on our nearly $1 billion REIT.

US Economy –

After a vigorous 3rd quarter in 2013, the economy has fallen back to 6 months of slow growth and uncertainty as the new Fed Chairman, Janet Yellen, continues tapering the artificial support of the monetary system. The year has started exactly as we forecasted in our last newsletter – with a wobbly/sideways stock market and virtually every other asset class (see below) showing only slight gains of 1-3% which are the opposite of 2013. Interest rates have dropped slightly and are holding for now, but Mrs. Yellen has signaled that she expects short-term rates will rise to 3% by the end of 2015 and 4% by the end of 2016. This would only happen if the economy actually picks up organically after the Fed has stopped current stimulus.

(As reported in WSJ.com on February 27, 2014) By Kevin Noblet:

“It’s all too common a situation: A client has beloved possessions that he or she thinks the children will treasure someday, too. But have they ever been asked if they really want the house, antique furniture or whatever it is dad or mom held so dear? No, they haven’t. California wealth manager Mark Van Mourick relates just such a case to Wealth Adviser at WSJ.com. The client had $250,000 in Asian art she and her late husband spent 50 years collecting. She didn’t want it sold off after she died but, when asked at the adviser’s suggestion, the kids said they were likely to do just that. Mr. Van Mourick helped with an estate plan which took that reality into consideration.” READ FULL ARTICLE HERE

US Economy –

The strength of the American economy picked up steam in the 3rd quarter of 2013 with a final GDP estimate of 4.1%, about double the average of the last few years. It is further estimated that the 4th quarter GDP (despite the short government shutdown) also exceeded 3%. Unemployment has dropped to 7.0% and consumer sentiment is back up to 82.5 (Reuters/University of M), up from a November dip of 75.1. This in turn has led the Fed to finally announce the start of tapering to their long-term interest rate support/bond buying program. This positive economic news was welcomed by Wall Street and pushed the S&P 500 further, up 32% for the year, while the yield on the 10-year Treasury bond crept back up to its high for the year, near 3%.  

US & World Economy –

The rapid rise in the 10-year Treasury interest rate from 1.6% to 3% has rippled through the financial and real estate worlds. Bond portfolios got crushed, stocks dropped then rebounded and residential and commercial real estate appreciation has stalled. In response, the Fed has delayed the action that caused the rise (reducing its monthly bond repurchases) as they are concerned with not harming the improving economy. The financial markets are digesting all of this as well, and the 10-year Treasury yield has backed down to 2.65% for now.

(As reported in Entreprenuer.com on July 16, 2013)

What’s your number?

It seems that we all have a number in mind, whether realistic or not, that if we get there, our financial future would be secure and we could retire without worry. For many this “number” keeps growing and forever seems out of reach. For some this number is “a little bit more,” even though they have long passed their requirements for a comfortable retirement.

After more than 30 years of working with investors and retirees, I have perfected a formula that works for families looking into the future. As you approach retirement and you are taking care of only you and a spouse (children raised and parents are not a financial burden) then the following formula is a realistic target:

US & World Economy –

US consumers have kept the American economy slowly moving forward despite the weakness in our exports and the “sequester and tax” policies. Job growth has finally resumed, giving hope for a stronger second-half of the year economy. China’s slow down in growth (particularly in infrastructure and real estate) has contributed to a drop in commodities. Europe is emerging from its “double dip” recession after choosing austerity vs. US-style stimulus and remains vulnerable to set-backs as their unemployment remains at record levels.

DANA POINT, CA– (Marketwired – Jul 10, 2013) – Optivest Properties, a property acquisition and management company specializing in mini-storage warehouse and an affiliate of Optivest, announced today that they have joined Northwest Self Storage of Ore. and SecurCare Self Storage of Lone Tree, Colo. to form National Storage Affiliates (NSA), the first affiliate-owned and operated self-storage REIT (real estate investment trust).

NSA now has more than $800 million in committed asset value and is owned by its affiliate operators, who will contribute the ownership of their self-storage assets to NSA over the next few years, as current mortgage debt matures. The formation of NSA, a Maryland real estate investment trust, will make it the largest privately-owned company in the self-storage sector, with approximately 220 facilities, 100,000 storage units and 12.5 million rentable square feet of space located in 15 states.  READ MORE: Marketwired

(As reported in the North Dallas Gazette on May 8, 2013)
By: Mark Van Mourick

When selling a business, owners time their exits for many reasons: health, retirement planning, availability or lack of family successors, competition, technology change and many more. Yet overwhelmingly the question most often asked of financial advisors by entrepreneurial companies is “what’s my business worth?”

Mark Van Mourick, CEO and president of Optivest, Inc., provides five tips to help enhance the value of a business: 

US & World Economy –

Animal spirits are back! With Europe in a mild but stable recession, China on an upswing, US housing starts and prices rising (Case Shiller Index up 8.1% over the last 12 months ending in January – best since 2006), and the Dow Jones and S&P 500 both making new all-time highs, consumers and businesses alike are feeling better. Consider these new economic levels:  the stock market at new highs from 2007, S&P 500 quarterly earnings at new highs, US household net-worth at a new high ($69 trillion vs. $67 trillion), and household debt service to income ratios at a 30 year low (J.P. Morgan).

US & World Economy –

The world breathed a sigh of relief after the recent Fiscal Cliff vote and all of us are happy to remove that phrase from our vocabulary. The US economy is in good shape to absorb the changes to the taxes and likely debt ceiling outcome (more on that below) and according to most economists, should grow at 1.5 – 2.2% in 2013. In other words, more of the same slow growth we have experienced for the past couple of years. Regardless, a serious cloud has been lifted and businesses can now plan with greater confidence. In addition, China’s economy and US housing starts are building strength and will help the economy this year. While there is always something to worry about, the scope of our problems have become smaller over the last few years.