In Perspectives

I have the privilege of writing this post on July 1 – the midway point for the year.  I actually felt chills up my spine last week when I realized that we’re already closer to the next holiday shopping season than the last one.  Fortunately for those of us in the US, the halfway point coincides with a long holiday weekend that can be a good chance to take a break, step back, and take stock of where we’ve been and what might be coming next.  In my role as investment manager I am acutely aware of market and economic milestones that mark the passage of the year.  Perhaps that is why the close of the first half of 2014 seemed to sneak up on me more than in recent years, because much of this year has so far been marked by….a lack of major events in the markets.

After 2013 brought historic gains to US equities, many observers predicted that 2014 would be a much bumpier ride, and would likely bring about a market correction of 10% or more.  Legacy Trust entered the year feeling generally optimistic about the state of the US economy and believing modest equity gains were likely, although we too felt that a short-term market selloff was overdue and would not necessarily endanger our longer term outlook.  We also felt that interest rates were likely to edge higher as they had started to do in 2013, given the strengthening economy and the policy changes enacted by the Federal Reserve.  Such a move would cause core bond values to fall.

Instead investors have experienced the opposite.  The CBOE Volatility Index (VIX) hit a seven-year low in June, and virtually all major financial market segments including global equities, bonds, and commodities have posted gains in the first half of the year.  As you might expect, it is highly unusual for all of those asset classes to rally at the same time, since stocks and commodities generally post gains during stronger economic conditions while bonds typically gain during times of heightened uncertainty or economic weakness.   While we are certainly not going to complain about participating in market gains wherever they may come from, we are concerned that this trend is not sustainable and that investors need to be prepared for the inevitable change in direction.

Despite the slow and at times painful recovery, we are nevertheless more than five years past the market and economic bottom.  I much prefer the environment that we are in today to the gut wrenching market swings we experienced in 2007-2009, but I am concerned that five years of a bull market may be creating a sense of complacency when it comes to investment risk.  I encourage all investors to use this halfway point to reevaluate their strategies, and to work with their advisors in positioning portfolios for what is likely to be coming in the future, rather than what we’ve experienced in the past.

Legacy Trust and Your Right to Financial Privacy

At Legacy Trust we have established policies and practices that respect the financial privacy of all individuals who use our trust company. We believe it is critical to comply with the laws and regulations designed to secure your financial privacy. Your relationship with us as our client is very important to us, and we want you to understand our policies and practices about handling your information.

This Policy applies to you – This Policy applies to our relationships with individual clients who inquire about or obtain products or services from us for personal, family and household purposes.

Strict security measures – We take the security of information very seriously. We have established security standards and procedures to prevent access to client information. We maintain physical, electronic and procedural safeguards to guard client information.

Limited employee access – We have established procedures to limit employee access to information to only those employees with a business reason for accessing such information. We educate our employees about the importance of confidentiality and client privacy. We take appropriate disciplinary measures to enforce employee responsibilities regarding client information.

Why we collect information – We collect information about you to:

  • accurately identify you;
  • protect and administer your records, accounts and funds;
  • help us design or improve our products and services;
  • understand your financial needs;
  • save you time when you apply for new products and services; offer you quality products and services; and comply with certain laws and regulations;

We collect information – We collect and maintain your personal information so that we can provide investment management and other services to you. The types and categories of information that we collect and maintain about you include:

  • Information we receive from you to open an account or provide investment advice or other services to you (such as your home address, social security number, telephone, financial information and investment objectives).
  • Information that we generate to service your account or from our transactions with you (such as account statements and other financial information).
  • Information on your transactions with nonaffiliated third parties.

We have established procedures so that the financial information we collect is accurate, current and complete. We are committed to work with you to promptly correct any inaccurate information.

Our selective sharing of information – In order for us to provide investment management and other services to you, we do disclose your personal information in very limited instances, which include:

  • Disclosures to nonaffiliated companies as permitted by law, including those who help us service your account (such as providing account information to brokers and custodians).
  • Other limited disclosures as permitted by law, for example, required reports to government entities.

We do not share your information with third parties for marketing purposes. We do not sell your information.

Former clients – If you end your relationship with us, we will continue to adhere to the privacy policies and practices described in this notice.

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USA PATRIOT Act

Important Information About Procedures For Opening A New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

We apologize for any inconvenience this may cause; however, federal law prohibits us from waiving these requirements.

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