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I recently started looking for a car after my car was totaled (I'm fine)! The first car that I looked at was an older BMW being sold by an owner just down the street from me. I asked him why he was selling the car (I noticed there were two very new Prius’ in the garage). He said that because he was getting older, he wanted a car with up to date safety features.

Many of you know that through a sister company, not affiliated with Commonwealth Financial Network or your investment account, we prepare tax returns. Recently we e-filed one client and the e-file was rejected because a tax return had been filed under their social security number. The question was, what do we do next?

When I was growing up I use to play the card game War with my siblings. Each player would turn over one card at a time and the person with the highest card won the pile. The goal of the game was to get all the cards in the deck to win. When my son attended summer camp one year, one of his counselors taught him how to play Egyptian War. This was a far more complicated version of the traditional War card game, with many more cards being turned over before someone won the hand. That meant winner ‘take all’ potential with mistakes quickly swaying the game in one players favor. As I have been reading about the latest tariffs and potential for trade wars, I was struck by the contrast between those two cards games and the similarity to the ‘game’ being played by the Trump administration.

When President Trump recently put tariffs on steel imports essentially because other countries where "stealing" American steel worker jobs and American money in the form of trade deficits, was he really stopping the stealing? You've heard the expression "robbing Peter to pay Paul" right? Was there a little (or depending who you talk to a lot) of that going on?

The answer is, who knows? (CB where are you when I need you!)

Do you think that all the large name brand companies in the US will be gone, i.e., the companies that make your cell phone, cars, appliances, pharmaceuticals, cereal, clothes etc? I have been reading a lot of dystopian novels recently and if you believe those realities could come true, the answer is yes. If you are not quite that cynical or have at least slim hope for humanity to survive then your answer might be no.

Will company fortunes ebb and wane with the economy over the next 10 to 20 years? It is unlikely that any company can sustain growth 100% of the time (are you thinking large online 2-day shipping retailer?). Sometimes companies must spend a little more than they make to ensure future growth, so there can be some hiccups even for the brightest and the best. We have also watched some big-name companies’ misstep in their business planning and be bought out or taken over by another company.

You ask, why all the questions? The reason is the answers to the second two questions actually drive the answer to the first. Here’s why.

In my last post, I discussed the value of dividend paying stocks and how they could effectively place “brakes” on your portfolio but what about the accelerator? No, I am not suggesting anything dramatic here such as investing all your money in high tech or some exotic that will double the value of an index (BTW the latter doubles your losses too). Again, I am referring to the value of dividend paying stocks.

The benefit of dividend paying companies stock does not end with its ability to pay those dividends. To see what I mean, let’s look at another example

There are two guarantees with respect to the stock market. One that it goes up and two that it goes down. The uncertainties are

• When?

• How high/low will it go?

• For how long?

If we were able to predict these uncertainties, then investing would be as easy as going to sleep and waking up. Since we can’t predict these uncertainties (yep, the crystal ball is still broken), what precautions should you take against these inevitable occurrences?

The most logical answer to many is, don’t invest in the stock market! That logic is an entire Blog post on its own, so I will not go into that here. For those of you who already understand the logic of investing in the stock market, what can you do to minimize the when, high/low (the low being the real issue) and the how long? One simple way is buying dividend paying stocks. How would that help you ask? Let’s back up a little before I continue with this discussion.

I thought the title would be appropriate based on what has happened in the market the last few days. Here are a few things to keep in mind when trying to process market days like we just had.

What drives the economy or the more technical term, our Gross Domestic Product (GDP) (which is the sum of all goods and services sold in the US)?

1. 70% of GDP is driven by consumers, that is you, me and everyone buying stuff. At the super market, the auto mall, at the appliance store, at the gas station, online etc. Have you or your family, friends and associates been cutting back on spending? Most likely not. I haven't.

2. 30% is business to business sales. Another words bullet point 1 is "retail" and this second bullet point is "wholesale". Who do wholesalers sell to? Ultimately retailers, right? So eventually there has to be a consumer in the mix somewhere. Last I checked we are not yet selling to aliens and frankly that would still count if it was a US good or service.

The market is an advance indicator of the economy. Is the economy doing poorly? Do you know people who are concerned about losing their job? Are people you know cutting back on their expenses and "tightening their belts"? Or do people you know seem to be going out a lot, traveling and not worrying to much about expenses? Are friends, family and other people you know making large purchases? The latter behavior would suggest that people are spending money without too much worry which is good for the economy.

What drives the daily market?