In Perspectives

As you know, August has brought significant volatility to the stock market with both the S&P 500 and the Dow Jones Industrial Average dropping 5.8% last week and another 4% on Monday. The selloff came amidst continued declines in oil prices, economic turmoil in China, and uncertainty from the Federal Reserve as the minutes from their most recent meeting sent mixed signals about the timing of their much-anticipated interest rate hike. While the speed of the stock market decline has been unquestionably abrupt and difficult to stomach, we believe there are still many reasons to feel cautiously optimistic.

First, stock market volatility has been overdue for some time. Recall that the S&P 500 has delivered an average annualized return of 14% over the past three years and that we have not experienced a meaningful price drop since 2011, which is highly unusual by historical standards. Holding high-quality companies with sound balance sheets will help you ride out periods of short-term volatility.

Second, U.S. economic fundamentals remain solid and supportive. Extended stock market declines have historically been kicked off by an economic downturn, which we do not foresee. On the contrary, the U.S. economy is growing at an annualized pace of 3% and the labor market appears firm, with all indications showing that we appear to still be solidly in the midst of an economic expansion.

Third, although the signs of a slowdown in China are troubling and bear continued scrutiny, the direct impact on the U.S. should be limited. Only 2% of S&P 500 company revenue comes from China, and a recent analysis by economists at Goldman Sachs estimates that a 1% decline in China GDP growth would result in a modest 0.06% decline in U.S. growth.

Finally, remember that your stock investments are intended to be held for a period of at least 3-5 years and can withstand short-term volatility. While market selloffs are painful to ride out in the short run, try to keep in mind that investment plans are established with considerations to your near-term cash flow needs, and it is important to let your growth assets stay in the market to ride back upwards when the recent trend reverses as we know it eventually will.

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.


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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