Blog   2014

If the economy was a movie, “The Sequel” would be better than the original

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Find out why 2014’s economic forecast is looking promising

2014 the Sequel

The beginning of a new year means it’s time to hit the road – literally. Every January and February the UMB Private Wealth Management division visits nearly a dozen cities to deliver UMB’s annual economic forecast presentation to clients. The theme of this year’s presentation is “The Sequel.” Never short on drama, the economic story this year draws a parallel to a movie sequel, although, we believe it will be better than the original (2013’s forecast).

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Last year’s economic theme, “The Policy Basin,” predicted slow or low, basin-like growth. Most companies weren’t ready to begin hiring yet; capital expenditures were mainly on hold and consumer spending was noticeably low – clearly still on the defense from the Great Recession of 2008. And, that is exactly how the economic picture played out last year.

As an extension to last year’s theme, this year’s economic picture is slowly but surely looking better. We predict real GDP will improve from 1.9 percent in 2013 to 2.7 percent this year. This will be driven by the following factors:

  • There will be an increase in consumption as consumers perhaps end the deleveraging phase and enter the re-leveraging phase.
  • Increased spending in state and local governments is expected, as these entities will benefit from a boost in property, sales and other tax revenue. All but seven states have indicated that they intend to increase spending from 2013.
  • We believe better economic growth in 2014 will generate close to 200,000 additional jobs per month, which is up from 185,000 per month last year. This growth in additional jobs should reduce the U.S. unemployment rate to 6.0 percent by the end of the year, down from the 6.7 percent at the end of 2013.

We are looking forward to 2014 delivering more employment, improved consumer sentiment and strong GDP growth. And while this year’s economic story might not be a blockbuster, we believe it will be a positive year with good storylines for consumers and businesses, and if managed correctly, for investors as well.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

UMB Investment Management is a division within UMB Bank, n.a. that manages active portfolios for employee benefit plans, endowments and foundations, fiduciary accounts and individuals. UMB Financial Services, Inc.*  is a wholly owned subsidiary of UMB Bank, n.a. UMB Bank, n.a., is an affiliate within the UMB Financial Corporation.

This content is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. Statements in this report are based on the opinions of UMB Investment Management and the information available at the time this report was published.

All opinions represent our judgments as of the date of this report and are subject to change at any time without notice. You should not use this report as a substitute for your own judgment, and you should consult professional advisors before making any tax, legal, financial planning or investment decisions. This report contains no investment recommendations and you should not interpret the statements in this report as investment, tax, legal, or financial planning advice. UMB Investment Management obtained information used in this report from third-party sources it believes to be reliable, but this information is not necessarily comprehensive and UMB Investment Management does not guarantee that it is accurate.

All investments involve risk, including the possible loss of principal. Past performance is no guarantee of future results. Neither UMB Investment Management nor its affiliates, directors, officers, employees or agents accepts any liability for any loss or damage arising out of your use of all or any part of this report.

“UMB” – Reg. U.S. Pat. & Tm. Off. Copyright © 2012. UMB Financial Corporation. All Rights Reserved.

*Investment Products Offered Through UMB Financial Services, Inc

Member FINRA, SIPC

NOT FDIC INSURED/ NO BANK GUARANTEE/ MAY LOSE VALUE


K.C. Mathews joined UMB in 2002. As executive vice president and chief investment officer, Mr. Mathews is responsible for the development, execution and oversight of UMB’s investment strategy. He is chairman of the Trust Investment, Asset Allocation and Trust Policy Committees. Mr. Mathews has more than 20 years of diverse experience in the investment industry. Prior to joining UMB, he served as vice president and manager of the portfolio management group at Bank of Oklahoma for nine years. Mr. Mathews earned a bachelor’s degree from the University of Minnesota and a master’s degree in business administration from the University of Notre Dame. Mr. Mathews attended the ABA National Trust School at Northwestern University and is a Chartered Financial Analyst and member of the CFA Institute. He is past president of the Kansas City CFA Society and a past president of the Oklahoma Society of Financial Analysts.



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The Credit Conversation: Now is the time to talk with your private banker

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Personal lending was a completely different world just a few short years ago. With shifts in the financial landscape, economic uncertainty and low interest rates, this is a good time for you to talk with a private banker and create a financial plan for the future—and the conversation should start with the topic of credit.

What was best for a person five years ago may not be the right choice now. Markets shift, and it’s important to occasionally survey the financial landscape with your private banker and possibly prepare for new opportunities.

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  • Work with advisors, not transaction managers.
    Sound financial planning is built on strong relationships, not individual transactions. Those relationships are built on knowledge and trust. A private banker should be acting as your advisor so they can help you make decisions that fit both your short- and long-term goals. Advisors will focus on tomorrow’s financial decisions, not today’s transaction.
  • Don’t make credit decisions with blinders on.
    No financial decision should be made without knowing the overall financial picture. In a trustworthy banking relationship, your private banker works alongside an entire team of experts to determine the best lending solutions for areas such as investment, tax and retirement purposes while also taking into consideration the overall wealth and estate plan.
  • Create a customized credit plan.
    It’s important to understand all the options. The truth: most people don’t proactively manage the borrowing side of their personal balance sheets when they plan to purchase a luxury vehicle, a business or a second home. That may stem from not knowing all of the varied credit options available.

    A private banker can help you explore and customize lending solutions to match risk and best leverage your assets. This provides you with options that may extend beyond the ones commonly offered in the marketplace.
  • Prepare for the unexpected with a line of credit.
    As the old saying goes, the time to borrow money is when you don’t need it. For example, a line of credit can be an invaluable tool to help you prepare for the unexpected and manage your overall financial picture.Lines of credit can be used for a wide variety of purposes, including major ticket purchases, home improvements, education and medical bills. Additionally, lines of credit can provide you with peace of mind if and when unexpected expenses occur.

As you plan for your future, it’s important to talk with a professional who can ensure you are taking full advantage of the many credit solutions available to you while also providing you with advice related to your overall wealth plan.

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



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Navigating through the “sandwich years” (Hometown Perspective: Warsaw, Mo.)

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My husband and I are very proud of our three children who are currently in various stages of college. We’re also blessed to have some of our parents still with us. We’re in the midst of the “sandwich years.” Our children are transitioning into adulthood and our parents are dealing with the prospect of additional – and often much higher – health care costs.

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The situation certainly isn’t new, but the financial challenges of this particular age group have recently changed. In addition to your retirement fund(s) likely taking significant losses during the financial crisis, those of us currently in the sandwich years also face the financial challenges of our children and parents. Our kids are graduating into an extremely difficult job market, while our parents are dealing with the rising costs of health care on a fixed income. With these challenges, sometimes our parents and kids may need our help financially.

Don’t wait until you and your family are faced with these issues to begin dealing with them. Usually if a financial emergency occurs, you won’t have much time before you have to act. In my thirty plus years at UMB, I have seen customers in the middle of these transition years who haven’t had important discussions with their kids or their parents soon enough. Living in an area with a high concentration of retirees, I’ve seen countless children of senior parents who have waited too long to talk to them about their financial plans.

So what can you do to plan for the sandwich years?

Prepare your children for financial independence by:

  • Opening a college fund as soon as possible (your kids don’t have to be burdened with student loan repayments while they work to become financially stable).
  • Teaching them the foundation of financial responsibility at an early age.
  • Encouraging them to hold part-time jobs as teenagers to develop a strong work ethic early on, and learn the benefit of saving and budgeting.

Prepare your parents for the issues they will face by:

  • Having an open dialogue about their overall financial situation, while being respectful of their privacy and wishes.
  • Approaching the sensitive subjects of having a will, power of attorney and health care directive. They are difficult conversations, but it’s better to have them early. It is much harder to discuss finances when failing health and/or mental incapacity have occurred.

Prepare yourself for the sandwich years by:

  • Talking regularly with your financial advisor about what you need to do to prepare for your own retirement.
  • Creating an emergency fund. You don’t want to dip into your retirement fund if something should happen and your kids or parents need financial help.

The sandwich years can be very stressful but that stress can be greatly reduced if you plan ahead. Prepare your children to become financially independent young adults and ensure your parents have a financial plan for their senior years. And don’t forget to make your own financial preparations. Your children will thank you for it when they reach their sandwich years.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Ms. Porter is senior vice president and financial center manager for the Eastgate location in Warsaw, Mo. She joined UMB in 1981. Ms. Porter is responsible for managing the consumer sales and functions of that location and has been involved in many other areas of the bank in her thirty-two years with UMB. Actively involved in the community, she has worked closely with the Warsaw High School vocal and instrumental departments for many years. She is a trustee of the Mary Lay Scholarship Fund, currently serves on the Harbor Village Fund fundraising committee and is a board member of the Warsaw Area Chamber of Commerce.



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The Plan in Planned Giving

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Planned giving can be an important tool when planning for the future of your estate. Some may have a desire to give to non-profit organizations, including their alma mater, a medical research project or a favorite youth organization. Whatever your desire, make sure you work with an experienced financial partner that can help guide you through the process to ensure your goals can be met.

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First, what constitutes a meaningful gift?

Quite simply, any gift is a meaningful gift. Many people are under the impression that only the very wealthy can be philanthropic. However, this is not the case. Gifts of any size are greatly appreciated by non-profit organizations, especially now as economic challenges have affected many individuals’ ability to donate while the needs continue to grow.

Motivations for gifting

The reasons for gifting vary greatly depending on the individual. Compassion for those in need, an extension of a religious or spiritual commitment, desire to share good fortune with others and memorializing the lives of others are some of the most prevalent reasons for planned gifts. You should personally evaluate your motivation and goals, and keep them in mind when determining how and when you want to support a cause.

Selecting the “right” organization

There are many worthy organizations, and choosing the non-profit that best fits your giving intentions is extremely important. Once your inspiration for giving has been clearly identified, make a short-list of potential groups. Organizations should be carefully researched and vetted to ensure you are comfortable with the final decision. It’s important to learn about a specific topic or organization, so your philanthropy can be used in a meaningful way. Once one or more organizations have been selected, a financial partner can help you define your vision, determine how the gift will be distributed and then evaluate, when possible, how the gift has been used.

Gift Options

Another item to consider is the type of gift you may want to give. Many organizations have gift acceptance policies, which may exclude certain types of donations. Things like stocks, real estate, art or other items may be quite valuable, but you should have a conversation with the organization first to ensure they are able to accept these types of gifts.  

Planned giving is an extremely meaningful and personal investment. Taking the time to evaluate these types of questions can really help individuals and organizations make the most of charitable gifts.


Jan Leonard is senior vice president and managing director for charitable trusts, private foundations and fine art services. She joined UMB in 2003 and has more than 25 years of experience in the management of private and public organizations. Leonard earned a bachelor’s degree from Arkansas Tech University and a master’s degree in business administration from Ottawa University in Ottawa, Kan. She is also a graduate of the Cannon School of Foundation Management.



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In memory

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It is with profound sorrow that I share the passing of my father, R. Crosby Kemper, Jr., chairman emeritus of UMB Financial Corporation. He passed away yesterday.

My father had a tremendous influence on the growth and vitality of UMB and on so many businesses throughout the Midwest. He was a man of great intellect, integrity and values, and was an inspiration to all that had the pleasure to know him. He also leaves a profound legacy of contributions to civic and charitable causes related to his beloved Kansas City. His business acumen and personal generosity were evident in all that he did. 

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To help pay tribute, there is a legacy site, rcrosbykemperjr.com, that has been created to honor him. The site includes his biography, photos, videos and extensive personal history. And while there is no possible way to truly convey who he was and the contributions he made, I believe this site provides a glimpse of that, clearly showing he lived every day to the fullest and that this world is a better place because of him.

Also, if you have a favorite memory of my dad that you would like to share, you can post this on UMB Bank’s Facebook page or send an email to condolences@umb.com.

Our family thanks you for your support and thoughts during this difficult time.

Sincerely,

Mariner 


Mariner is the chairman and chief executive officer of UMB Financial Corporation and UMB Bank, n.a. He joined UMB in 1997. Mr. Kemper is active in both civic and philanthropic endeavors. One of the causes he is most passionate about is the arts. He currently serves as a trustee and executive committee member for the Denver Art Museum and is a past board member for The Arts Council of Metropolitan Kansas City.



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