EPIC CAPITAL WEALTH MANAGEMENT

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1 WEEKLY MARKET COMMENTARY April 20, 2015 MODERATE INFLATION RESUMES The Consumer Price Index rose 0.2% for a second consecutive month in March, as did the Producer Price Index (in a marked departure from its 0.5% February retreat). Economists polled by Market Watch had forecast a 0.3% March advance in both the headline CPI and PPI. 1 GROUNDBREAKING UP 2.0% FOR MARCH Housing industry analysts had expected a much greater increase; this put the annual pace of housing starts at 926,000 instead of the desired 1 million mark. The Census Bureau also reported building permits declining 5.7% last month. 2 CONSUMER SENTIMENT, RETAIL SALES BOTH RISE Shoppers increased retail purchases by 0.9% in March, 0.4% minus auto buying. Retail sales had slipped 1.1% in February. The University of Michigan s initial April consumer sentiment index came in at 95.9, 2.9 points above its final March reading. 1 OVERSEAS DEVELOPMENTS IMPEDE U.S. STOCKS Two factors played major roles in Wall Street s sharp Friday selloff: renewed fears of Greece defaulting on its debt payments to the International Monetary Fund, and China s decision to limit margin trading and allow more short selling in its stock market. The major indices retreated as follows across the week: Dow, 1.28% to 17,826.30; NASDAQ, 1.28% to 4,931.81; S&P 500, 0.99% to 2, ,4 % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA NASDAQ S&P REAL YIELD 4/17 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.02% 0.52% 1.46% 1.66% Sources: online.wsj.com, bigcharts.com, treasury.gov - 3/20/15 5,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

2 EPIC THOUGHTS - The Value of Double-Checking Your Retirement Strategy As you approach your third act, does it need to be adjusted? Motivational speaker Denis Waitley once remarked, You must stick to your conviction, but be ready to abandon your assumptions. That statement certainly applies to retirement planning. Your effort must not waver, yet you must also examine it from time to time. 1 For example, the level of risk you chose to tolerate at 35 or 40 may not be worth tolerating at 55 or 60. Additionally, you may realize that you will need more retirement income than previously assumed. With those factors and others in mind, here are some signs that you may need to double-check your retirement strategy. Your portfolio lacks significant diversification. Many baby boomers are approaching retirement with portfolios heavily weighted in equities. As many of them will have long retirements and a sustained need for growth investing, you could argue that this is entirely appropriate. If your retirement is near at hand, however, you might want to consider the length of this bull market and the possibility of irrational exuberance. The current bull has lasted about twice as long as the average one and brought appreciation in excess of 200%. It could rise higher: as InvesTech Research notes, two-thirds of the bull markets since 1955 have gained 20% or more in their final phase. Few analysts think a megabear will follow this historic rally, but even a typical bear market brings a reality check. The lesser bear markets since 1929 have brought an average 27.5% reversal for the S&P 500 and lasted an average of 12 months. 2 A poor quarter makes you anxious. You start watching the market like a hawk and check up on your investments more frequently than you once did. Some of this vigilance is only natural as you near retirement; after all, you have far more at stake than a millennial investor. Even so, this is a sign that you may be uncomfortable with the amount of risk in your portfolio. A portfolio review with a financial professional could be in order. A semi-annual or annual review is reasonable. One bad quarter should not tempt you to abandon a strategy that has worked for years, only to examine it in the face of sudden headwinds. You find yourself listening to friends & pundits. Your tennis partner has an opinion about when you should claim Social Security. So does your dentist. So does a noted radio personality or columnist. Their viewpoints may be well-informed, but they are likely expressing what they would do as they share what they feel you should do. If you seem increasingly interested in the financial opinions of friends, acquaintances and even total strangers, or the latest hot tip on the market, this hints at anxiety or restlessness about your financial strategy. Perhaps it is warranted, perhaps not. It may be time to reexamine some assumptions.

3 You wonder about the demands your lifestyle may make on your finances. You want to travel, golf, and have fun when you retire, and those potential lifestyle expenses now seem larger than they once were. Here is another instance where you may want to double-check your retirement savings and income strategy. You see what were once what-ifs becoming probabilities. You sense that you or your spouse might face a serious health issue in the not-so-distant future. It looks as if you may end up raising one of your grandchildren. It seems likely that you will provide eldercare for a sibling who may move in with you. These life events (and others) may prompt a new look at your financial assumptions. You think you will retire to another state. Say you retire to Florida. There is no state income tax in Florida. So your retirement tax burden may decrease with such a move (though some states have higher property taxes to offset the lack of state taxes). To what degree will geographic considerations affect your retirement income, or need for income? Such geographic factors are worth considering. 3 You wonder how deeply inflation will impact your retirement income. A recent Morningstar analysis of retiree spending data compiled by the federal government noticed something interesting: for the typical retiree, spending declines in inflation-adjusted terms between age 65 and age 90. So the assumption that retirees increase household spending over time in light of inflation may be flawed. Of course, inflation has been mild for the past several years. If inflation spikes, however, that assumption might prove wholly valid. 3 Looking at your retirement strategy anew has merit. As the years go by, priorities change and needs arise. New questions call for appraisals of old assumptions. Reviewing your approach to investing and saving at mid-life is only rational, for your retirement strategy must suit the objectives you now have before you rather than those you set in your past. THE WEEK AHEAD: On Monday, Morgan Stanley, Halliburton, IBM, Rent-A-Center, Hasbro and Royal Caribbean Cruises present earnings. Tuesday, the earnings parade continues with results from Under Armour, Kimberly-Clark, East West Bancorp, Credit Suisse Group, Northern Trust, Chipotle, Discover, Lockheed Martin, Amgen, Fifth Third, Manpower, Verizon, Gannett Co., Harley-Davidson, and Yum! Brands. Wednesday, March existing home sales figures complement earnings from Logitech, Coca-Cola, AT&T, Facebook, Cheesecake Factory, Owens Corning, Boeing, ebay, McDonald s, Qualcomm, Abbott Labs, Bank of New York Mellon, Raymond James, Ameriprise Financial, AutoNation and Texas Instruments. Thursday brings factory PMIs for China and the euro area, March new home sales numbers, a new initial claims report and earnings from BB&T, Procter & Gamble, Southwest Airlines, 3M, Capital One, Dunkin Brands, Altera, General Motors, E*Trade, Caterpillar, Google, Microsoft, Dow Chemical, Amazon, Briggs & Stratton, Dr. Pepper Snapple and PepsiCo. Euro area finance ministers and central bankers meet Friday as Wall Street interprets March hard goods orders and earnings from Siemens, Tyco, State Street, Xerox, American Airlines and Biogen.

4 WEEKLY FOCUS THINK ABOUT IT We all have big changes in our lives that are more or less a second chance. - Harrison Ford FINANCIAL FACTOID - The S&P 500 bull market that began on 3/09/09 is now in its 74th month. The average bull market for the stock index since 1950 (including the current bull) has lasted 59 months. EPIC HUMOR A man gathered all of his children together and said Children when George Washington knocked down the cherry tree, he told his father honestly that it was him, now answer me honestly, who knocked down the outhouse? Finally the youngest son admitted it was him, at which he received a lashing he wouldn t soon forget. That s not fair complained the son, George Washington didn t get punished when he told the truth. Son replied the Father, The difference is, that George Washington s father wasn t in the tree when he knocked it down! Have a great week! Edward R. Doughty, CFP edoughty@epiccapital.com Website: Please be sure to Like us on Facebook, Follow us on Twitter, Get Linked with me on LinkedIn, and Subscribe to the Epic Capital channel on YouTube. Simply click on these icons: P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this with their address and we will ask for their permission to be added. Securities offered through LPL Financial, Member FINRA/SIPC. This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. Citations. 1 - marketwatch.com/economy-politics/calendars/economic [4/17/15] 2 - nasdaq.com/article/forex-yen-slightly-stronger-ahead-of-consumer-data-all-eyes-on-greece-cm [4/16/15] 3 - money.cnn.com/2015/04/17/investing/stocks-market-dow-global-selloff/index.html [4/17/15] 4 - markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [4/17/15]

5 5 - markets.wsj.com/us [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=djia&closedate=4%2f17%2f14&x=0&y=0 [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=comp&closedate=4%2f17%2f14&x=0&y=0 [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=spx&closedate=4%2f17%2f14&x=0&y=0 [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=djia&closedate=4%2f16%2f10&x=0&y=0 [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=comp&closedate=4%2f16%2f10&x=0&y=0 [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=spx&closedate=4%2f16%2f10&x=0&y=0 [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=djia&closedate=4%2f18%2f05&x=0&y=0 [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=comp&closedate=4%2f18%2f05&x=0&y=0 [4/17/15] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=spx&closedate=4%2f18%2f05&x=0&y=0 [4/17/15] 7 - treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=realyield [4/17/15] 8 - treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=realyieldall [4/17/15] Article Citations 1 - quotes.lifehack.org/quote/denis-waitley/you-must-stick-to-your-conviction-but/ [4/16/15] 2 - fortune.com/2015/04/16/taming-the-bear-market/ [4/16/15] 3 - tinyurl.com/odyle9s [12/25/13]