Author Archives: Kathryn

Welcome from Beautiful Pawleys Island!

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Recently I returned to the church of my childhood, Our Lady of Victory.  I went alone, entered the familiar space and found the row of pews where my father, brother and I sat almost every Sunday at 7:30 a.m. (although we were usually a bit late after a long night of Saturday Night Live).  As I sat in the pew and allowed the memories of our past to swirl over me, I though much of my father, who has been gone for well over 10 years.  But I though mostly of my brother, and I could picture him seated up in his chair as a young altar boy.  I could see him holding the tall candles, and the expression on his face as he tried to be perfectly still, and as he tried to speak and walk in perfect unison with Monsignor Fleming, who led the early Sunday morning mass.  My big brother has always watched over me, and as I remembered him in our Catholic church, I thought of how hard he tried to do everything exactly right.  Not just right, but exactly right. 

My brother and I are different in many ways, but one thing we share is a common desire to work hard, do the right thing, and make good within our respective communities.  Most share that purpose, which is why I have a passion for helping people in the pursuit of their dreams.  I am not a spiritual advisor by any means, but I help with fundamental financial decisions which allow individuals, families and corporations to pursue their dreams.  We all have our strengths and areas for improvement, but many of us share a common value to try to make things around us a bit better.  Not just for ourselves, but for our communities and beyond.  We are trying to live right.  That desire, I believe, is what causes us to see our investment decisions with rose-colored glasses.  There we stand, quivering inside just like my brother, in front of the entire congregation and universe, just trying to put our best foot forward. 

That desire to just do right colors our vision and, suddenly, the stories we tell our friends involve stocks that double in value within a ridiculously short time period.  We tend to leave out the stories of other investments that lost money big time because we took a hot tip or chose to believe we could make a quick and easy buck.  That same quivering desire has left baby boomers unprepared for retirement, pensions underfunded, and marriages and families divided due to critical differences of opinion around finances. 

Take heart!  Over the years I have gathered information and practical experience to help people improve their financial and investment decisions.  I have met people from all walks of life and learned something new from each and every one of them.  This practical guide will give you just enough science and discipline to improve your current situation, but leaves enough room for art, creativity and flexibility to make it fun!  My brother ended up doing just fine, and because of his effort to do things just right, his learning experience and efforts as a young altar boy continue to pay dividends today.  Invest right, live right! 

© 2012 Pawleys Investment Advisors, LLC.  All rights reserved.

Gorilla Glass, the Dreamliner and America’s best kept economic secret

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Published on MarketWatch.com

November 11, 2011

Gorilla Glass, the Dreamliner and America’s best kept economic secret –by Kathryn Schwartz

Many investors have exited the equity markets and sit trembling on the sidelines.  Since June 1, investors redeemed over $155 billion from long term equity funds.  Those sitting in cash earning no interest truly believe the American economy is doomed.  Let’s look back in time to see where the future might lead us before fear causes investors to miss out.  Imagine a world without telephones or airplanes.  It is hard to believe that it has been just over 100 years since both were invented, in Massachusetts and North Carolina respectively.  Just a century ago, the world functioned without phones or planes.  With the recent passing of Steve Jobs, there is more buzz about creativity and invention.  Will innovation catalyze the next economic boom in America and take the equity markets higher?

Phones have come a long way since 1876.  Gorilla Glass, the thin, lightweight glass that resists scratches and damage and is produced by Corning (symbol: GLW) for use in Smartphones, has a popular allure.  The attention comes not from the technology of photovoltaic glass, but from the discussion of its use in Apple’s iPhone (Apple does not disclose the identity of many suppliers).  But more interestingly perhaps, is the story about potential application of Gorilla Glass technology in generating solar power.  Last year, Apple was granted the first ever patent for solar powered portable devices.  The elimination of the need for different phone chargers would no doubt be a game-changer.  But imagine a house with a roof comprised of glass sheets less that 1mm thick that can withstand hurricane-force winds and severe hail, and collect enough energy to run the entire home!  These Corning panels are currently in testing.

Planes have come a long way since 1903.  In 2009, Boeing (symbol: BA) selected North Charleston, South Carolina for final assembly and delivery of its 787 Dreamliner.  As a result, a contentious labor dispute has boiled up from the Washington state-based aerospace union.  The cloud of the dispute blurs the view of the new plane’s ground-breaking technology.  Planes have been constructed using composite materials for decades, but the Dreamliner is constructed of about 50% carbon fiber, reinforced plastic and other materials.  The carbon fiber body is not only lighter, but stronger.  The Dreamliner is billed as the world’s most fuel efficient airplane, consuming 20% less fuel, and offers a 30% reduction in maintenance costs compared to similar sized aluminum body planes.  The fuselage is assembled in composite barrel sections, eliminating multiple aluminum sheets and as many as 50,000 fasteners used on traditional aircraft.  Updated engines manufactured by General Electric and Rolls Royce are also used on the plane, and Boeing cites the new engines as the largest contributor to the improved fuel efficiency.  The interior is state of the art and offers extra humidity for the comfort of passengers.  And perhaps the most anticipated enhancement of all – cupholders – not just one, but two, at each seat.  Boeing announced just last week that it will lease space previously used to house NASA space shuttles in Florida to build next-generation spacecrafts.  The future is right around the corner!

In 1977, as a result of his dedication and hard work, my father was promoted to the newly created position of Manager of Quality at Corning.  Well before, Japanese companies had built a culture focused on quality and process improvement, and they were eating our lunch.  The late 1970’s represented a refocusing of American companies on quality, and this laid the groundwork for one of the largest and longest economic boom cycles in U.S. history.  Companies such and Corning and Boeing, who focus not just on creativity but also on delivering the highest level of quality, have been able to develop amazing products such as Gorilla Glass and the 787 Dreamliner.  The secret is not so secret.  It is the focus on quality, the hard work, and the unbridled spirit of America that will create the innovations that will catalyze our next economic boom.   And in the meantime, investors can collect dividends of 2.1% and 2.6% respectively on GLW and BA, which certainly beats the bank.

The author and family members hold shares of GLW and BA.  Pawleys Investment Advisors is a Registered Investment Advisory Company based in South Carolina.  Future investment results cannot be guaranteed.  Please check with your advisor to see if these stocks are appropriate for your situation.

Sources: www.ici.org, www.Corning.com , www.Boeing.com

© 2011 Pawleys Investment Advisors, LLC. All rights reserved.

How to Invest with the Big Dogs

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Published on MarketWatch.com

October 18, 2011

How to Invest with the Big Dogs – by Kathryn Schwartz

Whether you are an active trader following momentum trends revealed by a stock chart, or a long-term investor with a broadly diversified portfolio, you can hunt with the big dogs of Wall Street.  Driven by the forces of marketing and 24×7 news, investors are bombarded with information that can become a big distraction.  If used properly, knowledge can be powerful, but if used randomly, it can be catastrophic to your results.  Historically, investments were distributed by a force of salespeople, so over time the public has been trained to make reactive decisions based upon emotion and hype.  Have you ever bought a stock based on a “tip” heard at a cocktail party or from a friend at work?  If so, it probably made the tipster feel incredibly smart and it may have even made you a bit of money, but most likely it did not make a lot of sense for your portfolio.  If you are a trader, various articles on the internet can convince you that unless you subscribe to a certain charting function or trading platform, you will invariably miss out on the best trades.  Take heart, investing should be a fun process driven by an appropriate level of excitement and engagement, and by following these 3 easy steps you can hunt with the big dogs:

Step 1 – Develop a Plan

A well-laid plan is thoughtful, relevant and specific, and can be used for both short-term and
long-term investing.  These two examples show you how:

Active Trader Long-Term   Investor
Trade the three   highest volume mid-cap stocks respectively in the Technology, Financial and Healthcare   sectors with buy/ sell triggers based on Bollinger Band limits, and take   trading account from $25,000 to $30,000 over 20 trading days. Invest Individual   Retirement Account in top-ranked Lipper mutual funds with lowest expense   ratios, splitting portfolio evenly among Fixed Income, S&P 500 and Global   categories, targeting 8% total portfolio return over the next year.

Step 2 – Evaluate Your Results on a Periodic Basis

It is easy to focus on what you could do better, but be sure to celebrate your successes as well.  Being objective in evaluating your plan will be the next step to improving it for use going forward.  Use the performance of related indices to evaluate your results.  For example, compare the results of a global fund to the MSCI EAFE index total return for the same time period.

Step 3 – Continually Improve your Strategy

Small changes can make a big difference in your results.  The best professional investors are systematic and they use raw numbers to remain objective.  Try to apply your strategy in different ways or change small factors to see if the results improve.

Being proactive helps keep your money safe and build upon your assets.  This summer, many reactive investors liquidated their portfolios near stock market lows, which permanently locked in losses.  A consistent, objective strategy will help protect you from unpredictable events.  The euphoria created by an over-heated market is as unhealthy as the fear created by unexpected drops.  By developing a plan, evaluating your results, and continually improving your strategy, you too can hunt with the big dogs of Wall Street.

© 2011 Pawleys Investment Advisors, LLC.   All rights reserved.