Small-Business Quarterly April 2018

Markets Rise Like an Escalator AND DROP LIKE AN ELEVATOR

The markets have been on a tier since March of 2009, when the S&P hit a low of 683. On Jan. 26, 2018, the S&P 500 was at 2,872, a total gain of 2,189 points for an average annual growth rate of approximately 17 percent. Of course, this was preceded by a massive drop from 1,561 in October of 2007 to 683 as the low 18 months later, a drop of 56 percent. The bottom reached in March 2009 brought the S&P to its lowest level since August 1996.The worst part of the decline occurred between May 2008 and March 2009, when the S&P dropped from 1,423 to 683, a 52 percent drop in 10 months. There’s a saying onWall Street:“Markets rise like an escalator and drop like an elevator.” Because investor fear of loss is so powerful, market corrections are much more intense than market rises. Recently, ARGALLUS FINANCIAL GROUP, INC.

we had a pullback that made some investors nervous, with some wondering if this was the beginning of the end or normal activity. The S&P 500 as of Dec. 31, 2017, was 2,673, and as of the close on March 1, 2018, was 2,677, a gain of four points, or a gain of 0.15 percent, basically 0 percent growth. However, on Jan. 26, 2018, the S&P 500 hit a high of 2,872.72, and on Feb. 8, 2018, it reached a low of 2,581, for a total top-to-bottom decline of 291.72 points, or down 10.9 percent.This is the first 10 percent pullback since early 2016, and it’s the longest period without a 5 percent pullback in 20 years.The market is also showing increased volatility with bigger swings in prices in both directions.

in, and the economy showing no signs of trouble, this is probably a normal pullback. As has been seen many times in the past, it is impossible to know at this point if this is a pullback or the start of a correction. We don’t get the answer to that question until afterward. Make sure your portfolio is aligned with your risk tolerance. Doing so enables you to go through these events with less stress. If you aren’t sure what your risk tolerance is, let us know, and we’ll email you a link to find out. Speak with your financial advisor to discuss your account and concerns and make any adjustments as needed. If you don’t have a financial advisor and would like to discuss your portfolio, call us to schedule a meeting.

What does this mean?With interest rates still low, the recent tax cuts just kicking

–Rick Dwyer

The process of selling a business may seem straightforward, but each deal has twists and turns that many sellers and buyers do not expect. We recently worked with a seller who wanted to retire, and they hired Murphy Business and Financial Services to sell the business. They listed the business with an out- of-area brokerage firm (with a large marketing fee) that made huge promises. After a year, there were still no buyers. At Murphy Business, we carefully review each company and their financials to ensure the business is ready to be sold with accurately prepared financials and records. Due to errors in bookkeeping, a change from seven days a week to five days a week, and many other small

issues, it took us four months to prepare the business for sale.

• Prepared a complete equipment list with estimated values

Once we listed the business, we had a buyer within a few days and closed the deal within 47 days. Here are some of the steps we took to get this business owner the best price and to sell the business quickly: • Pre-qualified the business with several banks to assure bank financing

• Prepared a complete inventory list

• Reviewed the appraisal of the real estate being sold with the business to assure fair market value

• Created a comprehensive

marketing package with all the critical information for a buyer to make a quick decision • Marketed the business on over 300 sites and leveraged networks to find a buyer

• Full review of financials (and

recasting to adjust for the change from seven days to five days)

–K im Deas

• Worked with the accountant to

clean up the P&L and make it easier to read, and corrected gross errors


Rick Dwyer, Financial Advisor “After running the Donna Half- Marathon and the Gate River Run, I plan to train this spring and summer for my first triathlon. For business, I plan to launch a series of ‘lunch and learns’ for business owners on succession and retirement planning.”

Lisa Pilgrim, CPA “My plans for spring are rest, relaxation, and a few trips around the country to visit family. Then I will regroup, continue to grow the practice, and improve our processes in order to better meet our clients’ needs.”


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