Denk Strategic Wealth Partners

Weekly eLetter 5/12/2023 — There’s Always Tomorrow

Well, not always. This will be a bit of a different missive. Instead of our typical letter of a generally useful financial ‘tip’, I’ve opted to share an experience with you that may (hopefully) move a few of you who have not yet thought about your passing away with any emphasis. If you’re planning to live forever, you can ignore this commentary; for the rest of you, please read on.

So, regular readers of our newsletters will know that we talk about general estate planning from time to time, and always end with a caveat that each person and family is different, and that we’d be glad to discuss your circumstances, and then suggest (remember we are not attorneys!) further steps that you might consider- including an exploratory visit to an estate planning attorney when it seems relevant. Our general planning tools suggest that we bring this up every 3 or four years or so, as estate plans tend to need tweaking and updating with changes to the codes, your circumstances, your family situation, and so on.

We find that MOST of our valued clients take these discussions to heart and follow up with some basic planning (creating or updating wills or trusts) and sometimes find that their personal situations require digging deeper to make sure that their exposures are handled.

But then, we also usually find a few people who, despite their good intentions, never (yes never!) quite get around to taking action to follow up. I’ve heard that the ‘road to Hell is paved with good intentions’ and we’ve certainly experienced a handful of those ‘roads to Hell’ over the past couple of years. Smart, capable clients and friends who agreed that they needed to spend some time cleaning up their titles, beneficiary designation, wills, and ancillary documents, perhaps creating a letter of last requests, and so on.

Within the past year we’ve seen a business owner pass away with no written plans to indicate what should be done with the business, an attorney who KNEW that he needed to FINISH his trust documents, and recently a marathon runner who was not concerned about his future because of his (reasonably) good health. It’s true that these are not the normal situation we run into when one passes away, but they DO occur, and each case created a royal mess for the surviving family. The business owner’s close friend (an attorney) stepped up and went way beyond reasonable expectations and that scene is continuing to clear up. The attorney without SIGNED docs left an incredible mess, as he had neglected to add in the details of a deceased first wife and a new wife to his written plans. His outdated documents didn’t contemplate a new wife.

But the case of the marathon runner really hit me — because he was a family member. Like many recently retired people, he was somewhat attentive to his health, although he had added some extra girth to his waist. We had discussed the need to have ‘something’ in place to let survivors know his intentions, and despite my nagging, the ‘something’ didn’t happen. One can only nag so much.

So, going back just over a month, I was having a phone-call with this person, and he mentioned that he felt awful: sickish, weak, generally bad. I said, ‘what did your doc say’, and he said- ‘haven’t talked to him yet’.

Fast forward a couple days, I called- he said he was still sick, dizzy, having trouble balancing. I said go see your doc NOW- he said too weak. One of my sons is an emergency room nurse, I called him, and he called and convinced my sick relative to go to see the doc, but he collapsed, and his wife called for an ambulance.

More fast forwarding- The next day I heard from his wife, and he was now in a covid level 2 trauma center- and she was sick as well.

I caught a flight the next day, and when I arrived, he had been intubated, and wasn’t able to talk.

Long story short; he passed away a couple days later. From a marathon runner to deceased — in less than a month.

And then the hell continued. He didn’t much keep paper records, did everything online, and left no record of most passwords and websites with his personal information.

Over the next two weeks we managed to find some email passwords and locate some records. But the search continues for some investment accounts, medical info, insurance records, and so on.

And it appears that the search will continue for a while. He had a filing system- but how it works is a mystery so far. And his digital life is locked up, for now.

Sorry for the long missive, but once again I’ll remind you, and each of our clients, that today is a good time to be sure your family knows what you want to happen when you pass away. (And that includes knowing your digital assets, passwords and so on). Yes, it COULD wait for tomorrow. But then perhaps it won’t.

Ron’s Market Minute – It’s the Little Things that Count

It’s no secret that we tend to follow a large number of technical indicators because they help us to determine which are the stronger parts of the market and the weakest. And then we attempt to invest in the strong parts and avoid the weaker ones. One of those indicators is the ‘advance-decline line’ of something (a stock index for example), it indicates market breadth, or basically how much of the market (indices) are participating – and supporting — in the market’s moves. In a strong market, breadth is typically high. By ‘high’ we mean – perhaps 65% or more of the stocks in an index are moving in the same direction as the index. In contrast, in a weaker market a smaller percentage of stocks might be moving in the same direction as the index.

In any event, it is ‘normal’ for the advance-decline to generally be moving (whatever the participation rate) in the same DIRECTION as the market index.

Here’s where I’m going with this. When the A-D line is NOT going the same direction as the main indexes, something isn’t quite right.

We’ve seen a couple of these ‘somethings’ this past week, and they are called ‘divergences’. The S&P 500 stock exchange index direction has been moving UP, but the AD indicator line has not. This is just an early warning that it’s something to watch.

However, we’re seeing the same sort of divergence with BOND closed-end funds. When this happens in the BOND world it tends to mean that there’s a lack of liquidity in the income markets. Things in the bond world have been reasonably strong since the market lows in the Fall- until recently. The AD line of closed-end bond funds has turned down while the major markets have not- yet. This change in behavior says that we may be seeing a lack of liquidity in the bond world. It means that liquidity COULD become a problem in bonds, and not just bonds, but also in the big-cap names that are currently supporting the major indexes. A lack of plentiful liquidity tends to make markets unhappy.

As I said, this is something that we watch. We watch it because it may be telling us something. Right now, conditions are such that we interpret what we see as cautionary. In other words, I’m not thrilled with the potential this shows for a weaker market going forward. It’s just a warning sign, and we’ll let you know if it becomes more than just a potential warning.

And, to all our mothers, we wish you the very best for this Mother’s Day!

Ronald P. Denk, CFP®
Investment Advisor
Denk Strategic Wealth Partners
10000 N. 31st Avenue, Suite D406A
Phoenix, AZ 85051
Phone (602) 252-8700
Fax (602) 252-8701
Toll-Free (877) The-Denk


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