The geopolitical landscape is heating up. U.S. relations with Syria, North Korea, China and Russia are in turmoil as the Trump administration flexes its military muscle. None of it bodes well for the stock market.

 

War cries and wealth are like water and oil. They don't mix well. For investors, there are far too many unknowns, especially when U.S. warships are steaming toward the Korean Peninsula. In Syria, American troops were spotted alongside Jordanian Special Forces troops along the border, despite our president's assurances that boots on the ground are out of the question. Actually, that isn't quite true, since U.S. Special Forces have been operating alongside our Syrian allies for some time.

 

Then there is Secretary of State Rex Tillerson's visit to Moscow. This diplomatic venture is a followup to last week's U.S. surprise tomahawking of one of Syria's airbases. Tillerson will be using America's new-found, willingness to use military might in order to further our diplomatic ends. In this case, to convince Putin to sever ties with Syrian dictator Bashar-al-Assad.

 

In hindsight, all that media speculation about President Trump's cozy relationship with Vladimir Putin seems somewhat far-fetched, given that Tillerson (who was also thought to be buddies with Vlad) is reported to be pursuing a hardline against Putin's failure to reign in its client state.

 

On yet another front, it appears President Trump has had enough grief from the "Fat-Boy" — chubby Kim Jong-un, grandson of the nation's founder, Kim II-sung, In a duel of tweets, the dictator warned of "catastrophic consequences" from any U.S. military action, while "The Donald" warned that "North Korea is looking for trouble" and that we would "solve the problem" with or without Chinese help.

 

Both sides have backed up these words with firepower. The U.S. response, in the form of an aircraft carrier and three guided-missile destroyers, is heading for North Korea while China has amassed 150,000 troops on its border with North Korea. In addition, Chinese medical and backup units have been stationed on the Yalu River in support of the People's Liberation Army.

 

Most military strategists believe that April 15 might be the day when things could heat up. It is the 105th anniversary of Kim Long-un's grand pappy. It could be an auspicious date too for "the Fat-boy" to brandish the puppet state's military might.

 

While all this is going on the markets have grown increasingly restive. The threat of war is normally a time when investors seek safety. Safe-haven plays such as gold, U.S. Treasury bonds and the U.S. dollar benefit from these concerns. They have done so this week. About the only good thing that can be said for these tense times is that they don't last too long.

 

If tension escalates, stocks usually fall fast over the course of a few days. If, as has happened in the past, geopolitical events resolve themselves, markets recoup their losses in an equally short time. Since the new administration appears to be trying to remove two thorns in our side simultaneously, the chances of further tension seem high. My advice is not to panic. Hang in there and remember that this too shall pass.

 

Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

Pick your poison — U.S.-Syrian strife, weak employment numbers, China-U.S. relations — those are just some of the issues investors had to contend with this week. Despite these potential roadblocks, the averages hung in there, losing little ground as the week closed.

 

There was even more bad news, if you include the latest minutes of the Federal Reserve Bank's FOMC meeting. There was much discussion among the members and a chorus of assent to begin the delicate task of reducing the Fed's $4.5 trillion balance sheet later this year. Recall that the Fed bought mountains of U.S. Treasury bonds over the last eight years in an effort to keep interest rates low (and stimulate the growth of the economy).

 

Now the bankers feel it may be time to start selling those bonds back into the market.

 

I remind readers that it is the path of interest rates this year, and not the success or failure of the Trump agenda that will worry me most. And speaking of the Trump agenda, Paul Ryan, the speaker of the House, cautioned investors (just before taking a two week recess) that cutting taxes may take longer than expected. That did not play well on Wall Street either.

 

As the week's uncertainty continued to build, President Trump's meeting on Thursday and Friday with his Chinese counterpart, Xi Jinping, had everyone biting their nails. Would there be a trade war? Would China agree to reign in their client state, North Korea? Of course, in predictable fashion, the psycho who runs that country, Kim Jong Un, chose this week to shoot missiles into the sea off the coast of Japan.

 

And just when Wall Street thought tensions could not get any higher, "The Donald" drops 59 Tomahawk missiles on top of a Syrian airbase in retaliation for the gassing of innocent people by that country's resident psycho, Bashar al-Assad. This U.S. strike took place in the middle of Trump's state dinner with Premier Xi. Talk about drama!

 

Overnight, stock index futures took a drubbing, but regained almost all of their losses by the time the markets opened in the U.S. on Friday morning. But then, the non-farms payroll report was released. Only 98,000 jobs were added in the month of March, while economists' estimates were in the 175,000 jobs gained vicinity. That took the wind out of the bull's sails once again.

 

Yet, here we sit with only minor declines on the day once again. That tells me two things.

 

That the pullback I predicted several weeks ago is still working its way through the markets.

 

That is a good thing. We could still drop another 2-3 percent from here. All-in, I have been expecting a 5-6 percent decline. To date, we have only experienced about half of that.

 

Number two, it bolsters my belief that the market's shallow decline will be followed by more upside. The markets have had every excuse to "crater" this week, but each time they fell, buyers appeared. There has been no panic, no sell-at-any-cost price orders that might indicate a more serious decline.

 

Both the bulls and the bears are hoping for more downside right now. The bears want to be vindicated in their belief that the markets are overvalued and overdue for a correction. My sense is that even the bears only want to make a little money, close their shorts, and then "go long" stocks. The bulls simply want to add to their existing positions, preferably at a cheaper price.

 

Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

Don't let romance blind you to the financial downside of living together. Unmarried couples need as much, if not more, financial and estate planning than those who are married. Without it, one or both partners may lose everything they have committed to the relationship. Here is a primer on what steps you should take.

 

Over 6.7 million unmarried couples are co-habitating in America at last count. Over 90 percent of them are heterosexual, in case you're wondering. As such, these couples, regardless of sexual orientation or length of the relationship, are considered and classified as unrelated individuals in the eyes of the law.

 

And the rights of unmarried couples are different depending on your state. Not all states, for example, recognize common-law marriages. As a result, without legal safeguards, the children you are raising, the assets you have mutually accumulated, and the house that you share can easily be taken from the surviving partner. The law will assume that any property and the care of surviving children should pass to your next of kin. Even your stated wishes of what you would want to happen in the event of your death or disability may not be followed.

 

OK, now that I have your attention, the first rule is to protect your estate. Your estate is everything and anything you own, or have contributed to before your death. Next, there needs to be documents established for situations that may be short of death but that still safeguard your rights. This would include what happens to you and/or your partner in the event of disability or illness, which might require someone else to make medical and financial decisions for you.

 

Such an agreement is commonly known as a domestic partnership agreement. Think of it as similar to a pre-nuptial agreement.

 

"Where is the romance in that?" might be your first reaction. "I will sound like a money-grubbing, so-and-so if I broach this with my partner."

 

Granted, it isn't a discussion normally accompanied by candlelight and soft music, but every relationship needs to be anchored in reality. The facts are that every unmarried couple should, at a minimum, discuss and implement a domestic partnership document as well as develop an understanding on expense sharing and individual insurance for household effects.

 

Next in line would be homeowner's insurance, unless the unmarried couple jointly own their home. That's because homeowner's insurance doesn't automatically cover both of you. If one person owns the residence, the other should at least purchase rental insurance to protect his or her belongings.

 

Finally, if both partners believe they are in a long-term, committed relationship, estate planning is a must. A married couple has at least an implied estate plan. The IRS and the courts have already established and safeguarded the rights of a married surviving spouse in the event of death. No such regulations exist for an unmarried couple. As such, everything needs to be documented in legal form.

 

At a minimum, there are at least 10 documents and/or provisions that an unmarried couple should at least consider: a domestic partnership agreement, a health care proxy, a will and/or living trust, durable power of attorney, beneficiaries (especially designations on retirement accounts), properly titled property, life insurance, funeral wishes, welfare and custody of any children.

 

All of the above may sound complicated and/or not worth the effort. You would be right, as long as you never break-up with your partner, or if you never die, but if you feel that either one could happen to you sometime in the future then heed my advice.

 

Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

As traders and institutions put to bed the first quarter, several concerns loom large in the weeks ahead. How things play out over that time period will have important implications for the averages, given that they are not far from their all-time, historical highs.

 

What will the Fed do in May? Will Washington pursue tax cuts and if so, will there be opposition?  What will first quarter earnings look like and how will markets react to all of the above? Let's look in my crystal ball, shall we?

 

Wall Street analysts expect corporate earnings to be higher by as much as 10-11 percent. That would be a big change from the recent past, where dismal guidance and feeble results have been the name of the game. If the numbers match or beat expectations, that could be good for stocks.

 

Next up, the central bank, what are its intentions between now and June? The betting is that there is little chance that the Fed will raise rates again between now and then. If so, chalk up another positive for the markets.

 

Then there is the Washington wild card where all sorts of things could go right or wrong, depending on a fractured Republican party and a mercurial administration. Last week's debacle, centered on the belly flop that was the House's attempt to "repeal and replace" Obamacare has set people thinking and worrying about the future.

 

I'm thinking that we may still need a few more days/weeks of consolidation before markets begin to climb. We have already brushed my first downside target for the S&P 500 Index at 2,323. Many times markets will re-test the lows before traders are satisfied that "the bottom is in," so don't be surprised if that occurs. As I have written before, this congestion is a good thing.

 

It's about time some sanity returned to the markets. Investors were way too optimistic about the extent and timing of Donald Trump's campaign promises. By the price action, one would have expected that all the things Trump promised would be delivered in his first 100 days. No never mind that he never said that, or event hinted that would occur.

 

Remember, however, that the short-term swings in the stock market are no longer controlled by human "thinkers and doers." While the "thinkers" appear gone forever, the "doers" are still around — in the form of superfast computers and algorithmic software programs. These robots account for over seventy percent of the daily volume spewing out thousands of buy and sell orders at the simple mention of a word or topic.

 

"Trump tweets health-care reform" or "House fails to pass" is all that is necessary to tack on (or off) a percentage or more of value in any stock, index or market, anywhere in the world. In the last quarter, an avalanche of such comments kept the robots spewing out orders, the majority of which were buys. No never mind that little in substance was accomplished during that period.

 

Part of the problem lies with the president's method of communicating with the public. Neither Wall Street nor Main Street is familiar with this sort of governance. In the past, when the leader of the largest most powerful nation on earth, said something publically, it was taken as gospel. The assumption was that mountains of research, discussions and thought crafted every word and punctuation mark of a President's words.

 

As such, we could all rely on those words as sacrosanct. It was the way policy could be telegraphed not only to American citizens but to the world at large. In the case of investors, it sometimes signaled a change in direction that could be acted upon with the surety that, good or bad, that whatever the change, it was here to stay.

 

That is not how things are done under this president. Yet, few seem to recognize this. In my opinion, President Trump's tweets should be taken for what they are: simple "High Fives," messages meant to keep us in the loop, more hopes and dreams, than signed and sealed policy statements. It will also take time for our newbie president and a Congress that hasn't been in the majority since 2007, to figure that out as well. At some point, but not necessarily at the same time, traders and investors will hopefully stop reacting to tweets and wait instead for more substantive actions before pulling the trigger. Time and patience are the key words here.

 

 

Times are changing. Over 12 million Americans now "live in sin," as my parents would say, and their numbers are increasing every year. As long as they remain together, everything is copacetic, but what happens when they break up?

 

Thanks to the economy, demographics, and life-style choices, young couples today are living together and having children despite their unmarried status. In my own family, my niece is pregnant, unmarried, and has no intentions of tying the knot. Although her partner is the love of her life, they have decided (for now) to keep it that way.

 

And in today's economy, there may be a lot of good reasons not to get married. Number one among them may be affordability. In my example, both parties are young and work in a drugstore, stocking shelves and clerking. They live with his mother because they can't afford to get a place of their own. You might ask why in the world they have decided to bring a child into the world under these economic circumstances, but that's none of my business and more and more young people see nothing wrong with it.

 

It could be that like most unmarried couples they are going through what I call a "test-drive" period to feel more emotionally and financially secure before making a more permanent commitment. That happens all the time. However, there are other reasons why getting married is no longer the first choice.

 

As earnings and education levels among men and women are flattening out, there is no longer a crying need by some women to get married just to make ends meet. It was a traditional cultural bias that no longer has relevance. Many of these educated couples are making good money but still hesitate to marry.

 

Statistics don't lie and the most recent data suggest these trends are growing. Nearly two-thirds of women, ranging from the ages of 15 to 44 years old, have reported in a Centers for Disease Control (CDC) study that they have experienced periods of cohabitation. That is a 41 percent increase since 2002.

 

And the more education a woman receives, the more likely she will have lived with a domestic partner. Last year, the Wall Street Journal found that 58 percent of women with four years of college have lived with a domestic partner at some point. It also appears that 39 percent of cohabitating adults have children. Some already had kids, while 25 percent of these couples gave birth while in unmarried relationships, according to the U.S. Census Bureau. That's double the rate reported in the early 2000s.

 

But it is not just young folks that are choosing to live this way. Older Americans are opting for unmarried relationships at a faster rate than younger people. And these Baby Boomers have no intention of tying the knot. Retirement homes, for example, are evidently hot beds of "illicit" relationships.

 

There are plenty of financial reasons why seniors may not want to get married. Oldsters who have been married before have financial complications and could risk the loss of certain benefits by getting remarried. Pension's benefits, social security, health insurance and alimony come to mind. Then there is the inheritance you are leaving to the kids and/or grandchildren. For many, who have already spent time and money on estate planning, simply don't want to make any changes and don't feel they need to as an unmarried couple. Then there are the kids, themselves.

 

A lot of adult children have a hard time accepting Mom or Dad's new relationship. Fears that their parent will be taken advantage of, ("is my inheritance threatened?") or left heartbroken is enough to cause arguments and tensions. As a result, many seniors won't remarry and just don't tell their children about these relationships. 

 

That can cause yet another potential headache down the road.

 

In my next column, we will discuss the financial pitfalls of these new relationships. No one wants to contemplate a break-up, but they do occur, and when they do, neither party has a legal leg to stand on. It is worse if children are involved. They are ways, however, that both partners can be protected, so stay tuned for Part II.

 

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.