Quarterly Economic Commentary

Inside this issue Quarterly Commentary

Teaching Heirs: “Passing the Torch...”

HM News After the Closing Bell Upcoming Events

Summer is often the time for

families to head to amusement

parks, to eat lots of food (with

questionable nutritional value) and

to seek body-jarring thrills on the

latest “bigger, better, scarier” roller

coaster. If you happened to miss

your chance to catch a thrill ride at

the park this year, then you were in

luck, since the world stock and

bond markets provided their own

wild ride for investors this summer,

and we all had a ticket to ride!

For stocks, July saw the markets

rally as they bounced off the June

lows that resulted from the

Fed-induced “panic attack”, or as

one analyst creatively called it, the

Taper Tantrum we experienced at

the end of the second quarter.

August and September, by contrast,

saw significant volatility brought on

by the risks of a military strike in

Syria and culminating in a tense

buildup to the September 18th

Federal Reserve meeting. It seems

the majority of market forecasters

were expecting a reduction in the

$85 billion per month bond buying

program, which the US economy

has been relying on as its life’s

blood for months. As it happens,

the Fed chose not to taper its bond-

buying program at this time, which

was not a surprise to us at Hudock

Moyer at all. We felt that Chairman

Bernanke had fairly clearly laid out

the conditions which were

necessary for the “taper” to begin,

and that those conditions had not

yet been met.

As with so many things, we

found much more clarity in the

hard facts than in the press’

interpretation of those facts, and

that is perhaps one of the best

mantras for investors in this time of

global economic uncertainty. The

media profit from sensationalism.

The hard facts may be less

fascinating, but they can reflect the

true reality. After swinging back

and forth in a five percent range for

two unsettling months, the S&P

ended September almost exactly

where it had ended July. It was a

tense, two-month roller coaster

ride to nowhere.

Issue 5 October, 2013

"Follow effective action

with quiet reflection.

From the quiet reflection

will come even more

effective action."

- James Levin

Our core purpose, our passion, is to make a profound differ-

ence in the lives of our clients, in the lives of our teammates,

and in our communities.

If you have any suggested topics for or feedback about the Hudock Moyer Newsletter please feel free to call us and share!

Commentary continued on next page

Commentary continued below

Bonds have presented a real

challenge for investors throughout

this year, which was not unex-

pected. Very early this year, we

shortened the bond duration of

the Hudock Moyer portfolios, in

an attempt to reduce downside

risk and volatility in that part of

our investment strategy. We

expected that changes in

economic conditions and certainly

in Federal Reserve policies and

programs in 2014 would put some

downward pressure on bond

prices.

The month of June showed us

downward pressure even on

shorter bonds, which was stronger

than we were expecting to see,

even with the threat of Fed

tapering. We believe this price

action demonstrated greater fear

in the bond market than we

thought was present, and June

may well have been a warning

shot for the price action we’ll see

over the next few months when

the Fed really does get ready to

taper. With that in mind, we felt

it appropriate to really batten

down the hatches on our bond

holdings to ride out that storm

and preserve capital for later

buying opportunities, while still

getting at least a little yield, versus

sitting in cash. To accomplish

that, we needed to shorten our

bond durations even further, and

we revised our portfolio strategies

to implement this change.

As we move into the fourth

quarter, markets are trying to

digest a government shutdown, a

need to increase the debt ceiling,

a handover of arguably the most

powerful leadership position in

the economic world and the

likelihood of a fifth year of

government operations without

an approved fiscal plan or

budget—and this is all just in the

US. Overseas, we have continued

sluggishness in emerging market

economies, fractured government

coalitions in several European

countries and continued unrest in

the Middle East. As advisors,

these conditions bring trepidation

but also at times excitement. As

we have repeatedly said, volatility

frequently brings opportunity, and

we are always watching for ways

to capitalize on the potential that

comes with the uncertainties, to

keep ourselves in the front seat of

the roller coaster.

–Jason Moyer, Chief Investment Officer

Book Corner.. “Raising Financially Fit Kids“ by Joline

Godfrey, CEO of Independent Means Inc,

is highly recommended for helping

young children or grandchildren

become financially fit. What I really like

about this book is that it takes age

groups starting with ages 5-8 and I

believe gives you specific tools, ideas,

and techniques for working with and

helping to develop each age group. In

the next column is an excerpt from the

book:

(Continued →)

“In times like these, it helps to recall that there have always been times like these.” - Paul Harvey

“Now, pay attention. Here is an

important mantra, best learned when the

child is at his or her youngest and cutest

stage (and when you are most susceptible

to clever manipulation by the little sweetie):

An allowance is not an entitlement or a

salary. It is a tool for teaching children how

to manage money. It’s money that gives

children an opportunity to practice the Ten

Basic Money Skills.

Say it again, with conviction:

An allowance is not an entitlement or a

salary. It is a tool for teaching children how

to manage money. It’s money that gives

children an opportunity to practice the Ten

Basic Money Skills.

If you decide to institute an allowance

(and yes, it’s a good idea), this is the

message you must internalize and

communicate. Just as blocks are great tools

for developing motor skills, an

early allowance develops money skills

(saving, sharing, earning, counting) that will

impact the rest of their lives. To help every-

one remember, print this out in large type

and stick it on your

refrigerator. Dear ________,

Your allowance is not an entitlement or a

salary. It’s money you will use to practice

the Ten Basic Money Skills; a tool to help

you learn how to manage money.

Love, Mom and Dad The first allowance begins with short, simple

rules like these communicated often and

clearly:

An allowance helps you become a big,

independent girl/boy.

The better you handle money, the

more quickly you will get additional

responsibilities, privileges, and a

bigger allowance to practice with.

You will practice counting, earning,

saving, sharing, growing, and

spending.

Every few months, we’ll look at how

you’re doing with these skills and see

what changes have been earned.”

Being a parent and/or grandparent is a

privilege as well as a responsibility. The easy

and fun way is not usually the best way.

Barbara

Teaching Heirs

Passing the Torch: Critical Conversations with Your Adult Children By: Bob Mauterstock Since I sold my practice three years ago, I

have taken on the task of helping adult children

open up conversations with their elderly

parents to discuss the critical issues of aging.

Recently after one of my presentations, a

woman approached me and asked a

question: “I had a meeting with my father and

we discussed all the critical issues you suggest

in your book. But after our meeting I realized I

needed to have this conversation with my own

children. But where do I start?” Her question

made me realize that this is an issue for more

than “the greatest generation.” As a baby

boomer myself, I began to think about how

10,000 of us are retiring every day, and most

of us have probably never had a frank

conversation with our own children about long

term care and end of life plans. Just because

we feel like we’re going to live forever, doesn’t

mean we shouldn’t be prepared!

Here are some simple things you can do to

get started; once you have your own house in

order, you’ll be better able to help your clients

do the same. I realize that not all planners are

boomers! Even if you don’t feel these steps are

appropriate for you right now, becoming

familiar with them will certainly help you help

your clients.

First, get your “lifefolio” in order. That’s all

the stuff you need for an orderly financial life.

Gather up your wills, trusts, durable powers of

attorney (POA) and health care proxies and

review them. Is the executor still the right

person to manage your estate? Who are the

trustees for your trust? Have you given the POA

to someone in addition to your spouse? Have

you taken the time to identify a health care

agent?

Next, find your life insurance, disability and

long term care policies and check the

provisions of each. Are the beneficiaries for the

life policies still correct? Are the beneficiary

statements attached? If you don’t have long

term care insurance, obtain it if necessary, my

guess is you’ll find it necessary. Your clients

will want to know that if you’re recommending

they purchase insurance, that you also have it.

One final important item in your “lifefolio”

is a list of all your key online accounts with user

names and passwords. Do you conduct

financial transactions online? Are your

investment and bank accounts online? If you

were incapacitated would your spouse or

children have the information necessary to

access your accounts and act on your behalf?

Now that you’ve gotten the quantitative

stuff out of the way, and before you meet with

your children, ask yourself the following

questions and discuss them with your spouse.

If my spouse or I become chronically ill

what will we do?

Will we move?

Who will take care of us?

How will we pay for our care?

Are there important values that we want

to pass on to our children?

What is our legacy? How do we want our

children and grandchildren to remember

us?

Are there important things we want to

happen whether we are alive or deceased?

How do we intend to pass on our estates

to our children?

Divide equally?

Divide based on need?

Divide based on merit?

What is our plan for our real estate?

Sell?

Retain for family?

Give to a specific child?

What are our end-of-life plans?

Now you are ready to schedule a meeting

with your adult children. There are several key

steps to insure the success of a family meeting.

1. Identify your alpha child (you know who

he or she is). Have them organize the

meeting (time and place) and invite their

siblings. I suggest that spouses and

children not attend.

2. Designate a facilitator. It could be you,

your spouse, or someone outside the

family such as your own financial advisor.

3. Nominate a scribe who will keep track of

what everyone says, promises made and

actions scheduled.

4. Open the meeting up with some of the key

issues you want to cover, including how

you want to be remembered (your legacy)

and what you want to happen whether

you are alive or deceased.

5. Share as many answers to the qualitative

questions as you can and ask for your

children’s feedback.

This meeting may be emotional and difficult to

have but once it is complete you will notice a

new level of communication and intimacy with

your children. You can feel confident that you

have communicated your wishes to your

family, and that they have been involved in the

process. Your discussions now will alleviate

stress during future difficult times. Schedule

your meeting with your children, maybe on

your next birthday, and see how it goes.

"Coming together is a beginning. Keeping together is progress. Working together is success."

- Henry Ford

HM News:

On July 26th, we held the 8th

Annual Hudock Moyer Charity Classic Golf

Tournament. It was a beautiful day and we

had a 100% turnout of golfers. This year’s

donation went to the Community Arts

Center (CAC) and with the generous

contributions of so many people, we raised

over $17,000. This takes the cumulative

total raised from this annual golf tournament

to over $100,000. We are very proud of this

event’s success and its impact on our

community. Thanks in large part to the

participation and contributions of so many

of you! (Pictured from left to right, Michael

Hudock Jr. & Jeri Sims, CAC).

© Bob Mauterstock, CFP Author of "Can We Talk, A Financial Guide for Baby Boomers Assisting Their Elderly Parents" available at www.giftofcommunication.com.

Holiday Event—Athens

December 3rd

Holiday Event—Williamsport

December 6th & 7th

Medicare Educational Event—Athens

November 7th

Medicare Educational Event—Williamsport

November 12th

PLEASE PLACE STAMP HERE

Upcoming Events

Please see our website (www.hudockmoyer.com) for updated event information or call our office at 866-855-0569 or 570-326-9500.

400 Market Street Suite 200 Williamsport, PA 17701 509 S. Main Street Athens, PA 18810 By appointment

Phone: 570-326-9500 Toll Free: 866-855-0569 Fax: 570-326-9577

www.hudockmoyer.com

Please remember that past performance may not be indicative of future results. You should not assume that any discussion of infor-mation contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Hudock Moyer Wealth Resources. Hudock Moyer Wealth Resources is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be constructed as legal or accounting advice. Securities offered through Comprehensive Asset Manage-ment and Servicing, Inc. (“CAMAS”), Member FINRA/SIPC (800-637-3211). Hudock Moyer Wealth Resources is independent of CAMAS.

“The arts are the best insurance policy a city can take on itself.”

(former mayor of Baton Rouge)

The Woodcock Foundation for the Appreciation of the Arts, Inc. was

honored as the recipient of the Director’s Chair at the Community Arts Center in Williamsport on Sunday, September 22, 2013. Lynne Gale of Lewisburg

and Lorrin Watson of Jacksonville, Florida, are the original creators/founders

of the WFAA, Inc. The money for the Foundation came from art their father,

Lyle S. Woodcock, collected during his business trips during the ‘50s, ‘60s, and

‘70s. “When his colleagues were becoming material for the “Mad Men”

writing staff during the cocktail hours, he was taking in paintings and making

friends at museums and galleries.” (Josh Brokaw, Williamsport Sun Gazette

9/16/13) This magnificent art collection was sold by his daughters to create a

dynamic, creative way of making a difference in the lives of people like you

and me. The mission statement of the Woodcock Foundation for the Appreciation of the Arts, Inc. is: “So long as there are little children to be introduced to the

creative arts and harried adults who missed exposure to great art and literature

and timeless music to be shared across all age groups, there will be a need for

efforts to encourage the Appreciation of the Arts.”

Over the last seven years, the Woodcock Foundation for the Appreciation

of the Arts, Inc. has contributed over $1,800,000 to the arts and related

organizations in the sisters' home communities of Lewisburg/Williamsport and

Jacksonville, Florida. I believe this generosity has given those communities

many amazing benefits making our community richer beyond words. Harried

adults, children, as well as countless others have been blessed by the beauty of

the moment that art and music provide. As a citizen of our community and a Director of the Woodcock Foundation

for the Appreciation of the Arts, I am grateful for their generous hearts as well

as their presence in our communities. We are blessed.

Warm regards, Barbara