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From The President’s Desk

Well the summer is upon us replete with its sun, sand, and New York humidity. Its funny how we all look forward to summer, and just days into the start of it begin to mourn the end... right from the beginning! The bland, monotone color of our yards become bright with assorted colors and greenery, flowers magically pop out of the earth and it just seems that the cycle of life is alive and well.

I am reminded as to how the cycle of life illustration of flowers reminds me so of the market this year. It's been the most volatile I've seen in years, resulting back in a flat position as of the time of this writing. As with flowers, we see the outer beauty, but the pain of the flower is not as loud as the pain of the volatility of the markets and its effects on us all. The ups and downs are not unlike the wet and dry seasons of the flower, bringing relief, pain and discomfort... only we seem to scream a lot louder when the conditions are not quite right... and so it goes.

The market this year has had its share of ups and downs, resulting in a lot of nothing with regard to gains and losses- it's mostly flat. Coming off a slightly negative year in 2015, it's not only the gains and losses we must look at, but the way it will affect our lifestyle, cash flow and overall long term plan. Life is about balance, and if the cash inflow are a fluctuating entity, so must be the outflows- that which we spend. Social Security raises are effectually non-existent, work raises are at a virtual freeze and our expenses keep going up. Clearly, the balance of inflows and outflows are becoming skewed in favor of the opposite way we would like to see them go. The market hit an all-time high in 7/15/16- the first time since 2012, showing the progress of the market is just playing catch up. We saw the effect of the "Brexit" vote (the leaving of Great Britain from the European Union) as unexpected as it was. It rocked the world markets and dropped the DOW by 600 points in one day, only to recover 93% of the drop in the following 5 days, and beyond in the days since. By the time you read this, you will know more about the following weeks and how it progressed, but we've seen the DOW trading in a narrow range between 18,000 and 18,500, and I expect it will continue to stay in this trading range for the next 6-12 months. While the Brexit decision is binding and came as a surprise, the actuality of it is that it may take two years or so for it to actually happen. Interest rates, projected to have at least two raises this year, now appear to be stable enough to stay at zero at least through the end of 2016. Oil seems to have leveled out in the $40 to $50 range, and inflation is comfortably in check. Then of course, we have the elephant... and donkey... in the room. How politics and the election will affect the markets is anybody's guess. Neither party's claims for change make much sense, nor regardless of the outcome, do many people understand that the President doesn't just make these promises happen just because he or she just said so. So, all we can count on is more political infighting and a lot of lack of surety on the part of any administration. Additionally, the sad unrest and infighting amongst our own Americans continue to put uncertainty on the political and economic climate. It is sad to see such turmoil within our own borders.

So, where does this leave us all in this time of uncertainty? Firstly, as always, I suggest that you look at your lifestyle, monthly expenditures and evaluate if it is within your income level to keep your cash flow from going to negative, meaning you need to supplement your monthly spending with digging into your savings. Make sure you maintain your emergency fund of 3-6 months of household expenses in your liquid, savings account. You all know I am a great believer in living life to the fullest, so don't take it too dramatically, but take it seriously. If you're having trouble making ends meet or are confused about how to adjust your balance sheet, give your Chestnut Planner a call for assistance... we are always here for you, and welcome your calls... even it's just to say HI!

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