YOUR FINANCIAL FUTURE

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1 YOUR FINANCIAL FUTURE October 2016 In This Issue Fed Leaves Rates Unchanged September 2016 As expected, the Feds policymaking arm, the FOMC, opted not to raise interest rates at the conclusion of its two-day policy meeting on Wednesday, September 21. We hope this educational resource proves helpful. We believe an educated investor is a better investor. Please call us if you have questions. Your Team at Community Trust Financial Services 101 N. Main St. Versailles, KY severda@ctbi.com Finding Your Risk Comfort Zone Determining the "just right" mix of investments is important to helping you meet your savings and investment goals. The following questions may help in figuring out what risk you can live with and where you might invest your savings. Plan Ahead for Gift Giving People may think of holidays and birthdays as the major gift-giving occasions. But there are events that occur throughout the year that call for the exchange or giving of gifts. Here are some tips to help you save and plan for the financial implications of gift giving.

2 2 Fed Leaves Rates Unchanged September 2016 Dear Valued Investor: As expected, the Federal Reserve's (Fed) policymaking arm, the Federal Open Market Committee (FOMC), opted not to raise interest rates at the conclusion of its two-day policy meeting on Wednesday, September 21. The FOMC did upgrade its assessment of the economy from its July statement, and noted that the case for an increase in the fed funds rate had strengthened. But it decided to wait for evidence of further progress toward its objectives. The FOMC statement said the Committee would continue to monitor global economic and financial developments. Fed Chair Janet Yellen and the FOMC statement noted that future rate hikes are dependent on the economy, labor market, and inflation tracking toward the FOMC's forecasts. The Fed dropped a strong hint to the markets that it is leaning toward raising rates in December. The FOMC's language suggests to us that barring a very bad run of economic data between now and December, a surprise out of the U.S. presidential election or Brexit negotiations, an unexpected move from China, or a terrorist attack that disrupts economic activity for a long period of time, the Fed is likely to raise rates at the December FOMC meeting. One rate hike is not expected to cause a big disruption in financial markets, especially given yesterday's signal from the Fed; however, a pickup in volatility would not be surprising following several months of steady and solid gains for stocks. These are unusual times with unconventional monetary policy. As always, I am here to help you understand the complex investing environment and will continue to keep you informed of relevant developments. If you have any questions, I encourage you to contact me. Thank you for your continued trust and confidence. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Economic forecasts set forth may not develop as predicted. All investing involves risk including loss of principal. The Federal Open Market Committee (FOMC) is the branch of the Federal Reserve Board that determines the direction of monetary policy. The eleven-person FOMC is composed of the seven-member board of governors, and the five Federal Reserve Bank presidents. The president of the Federal Reserve Bank of New York serves continuously, while the presidents of the other regional Federal Reserve Banks rotate their service in one-year terms. This research material has been prepared by LPL Financial LLC. Securities offered through LPL Financial LLC. Member FINRA/SIPC. Tracking # (Exp. 09/17)

3 3 Finding Your Risk Comfort Zone In the world of investing, risk is nearly unavoidable. Some investments are riskier than others, but while they may be more risky, they may also have the potential for higher reward. Likewise, some investors are willing to take on more risk than others to achieve their financial goals. How comfortable are you with risk? The following quiz may help you determine your risk tolerance. To determine your risk-tolerance level, add up your score. Give yourself one point for each "1," two for each "2," three for each "3," and four for each "4." How many years until you reach retirement or other financial goals? 1. Less than five years to 10 years to 20 years. 4. More than 20 years. What would you do if the stock market suffered a one-day drop of 10% or more? 1. Sell all of your stocks Adjust your portfolio mix toward "safer" investments, such as bonds or money markets Become very concerned and monitor the market on a daily basis. 4. Remain calm because you are investing for the long term. If your investments suffered an extended period of low or negative returns, you would: 1. Sell off all your investments. 2. Not sell, but stop investing. 3. Invest less than you normally would. 4. Continue to invest as much as, or more than, you have been. What are you looking for when selecting investments? 1. Safe investments that will preserve capital. 2. Investments with the potential for consistent, moderate growth. 3. Aggressive investments with excellent growth potential. 4. Bargain-priced investments that appear to have excellent growth potential. Are you likely to consider foreign investments? 1. Never. There are too many good opportunities in the United States. 2. Not likely. 3. I might consider it. 4. Yes, definitely. To determine your risk-tolerance level, add up your score. Give yourself one point for each "1," two for each "2," three for each "3," and four for each "4." A score of 5 to 7 means you may be a conservative investor who is most comfortable with a low-risk mix of investments; a score of 8 to 12 means you may be a cautious investor, but are not completely averse to risk; a score of 13 to 16 means you may be a moderate investor who might be willing to take on some aggressive investments to reach your goals; and a score of 17 to 20 may indicate that you are comfortable with risk as a means of reaching your goals. 1 Investing in stocks involves risks, including loss of principal. 2 Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price. An investment in a money market fund

4 4 is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund Wealth Management Systems Inc. All rights reserved

5 5 Plan Ahead for Gift Giving Special occasions often call for gift giving: a graduation in May, a wedding in June, an anniversary in July, and birthdays throughout the year. Each event seems to sneak up on us -- and our budgets. Retailers plan for holidays and seasonal sales, so why not do a little gift planning of your own? Whether you set up a formal gift account and contribute to it regularly or just stash away a few extra dollars here and there, it's good to accumulate cash that is earmarked for gift giving. Here are a few tips for your planning list: Save now. Gift buying will seem more manageable if you've been saving for it a little at a time. Whether you set up a formal gift account and contribute to it regularly or just stash away a few extra dollars here and there, it's good to accumulate cash that is earmarked for gift giving. Put a cap on spending. Work out a gift-giving budget for the year that includes a comfortable spending limit as well as a detailed list of individual gifts with spending caps for each. Then stick to it. Avoid credit traps. If you must charge your purchases, put them on your bank credit card. Department store cards typically charge a much higher interest rate. And make sure you watch out for the "buy now, pay later" offers. Although tempting at the time, it is very easy to forget about a DVD recorder you bought in November if the first payment isn't due until March. Two for one. When you find a great deal on something nice, buy two -- one for yourself and one to give away. Then, when a birthday or other unexpected event pops up and catches you by surprise, you'll be prepared with a gift. Importantly, you will have avoided the last-minute (and often expensive) rush to buy something quickly. Take advantage of post-holiday sales. In Canada, the United Kingdom, and other Commonwealth countries they call it Boxing Day, but here it's just the day after Christmas. For those truly die-hard shoppers, it can be the best shopping day of the year. Stores slash already reduced prices even more to make way for spring inventories. Gift giving is one of the easiest ways to overspend. But if you do a little planning before you shop, you'll approach each occasion with your budget and generosity intact. Give the Gift That Lasts a Lifetime If you'd like to give a child money but want to do something more lasting than writing a check, consider setting up a custodial account under either the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act (UGMA/UTMA) through a bank or investment company. Custodial accounts can help finance a child's future and lessen the giver's tax burden. Here are a few details you should be aware of. The UGMA/UTMA Facts: There are no income limits affecting eligibility to fund a custodial account. You can gift away up to $14,000 per child, each year ($28,000 for married couples) to as many children as you like without owing gift taxes. Beyond those amounts, gifts may be subject to federal gift taxes. Gifts made to UGMA/UTMA accounts are considered irrevocable; once the child reaches legal age (18 or 21, depending on the state), he or she gains full control over the assets. Since custodial accounts belong to the child, account assets may decrease the amount of financial aid a child can receive. Beware the "Kiddie Tax" Tax rules affecting UTMA/UGMA accounts bear careful consideration. Under the so-called "Kiddie Tax" rules, a child's investment income over a certain level is taxed at his or her parents' rate rather than the child's lower rate (typically 5% for most children). Prior to 2006, the Kiddie Tax rule applied only to children younger than 14. But the age limit has risen twice in the past few years. Now the Kiddie Tax includes dependents up to the age of 19 and those up to the age of 24 who are full-time students. Any investment income earned in excess of $2,000 will be taxed at the parents' higher tax rate. This communication is not intended to be tax advice and should not be treated as such. Each individual's tax situation is different. You should contact your tax professional to discuss your personal situation.

6 Wealth Management Systems Inc. All rights reserved

7 The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly. The financial consultants of Community Trust Financial Services are registered representatives with and Securities are offered through LPL Financial. Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Not Bank/Credit Union Not FDIC/NCUA Insured Guaranteed Not Insured by any Federal Government Agency May Lose Value Not a Bank Deposit This newsletter was created using Newsletter OnDemand, powered by Wealth Management Systems Inc.