Blog   Tagged ‘economy’

Manufacturing and Technology: A New Workforce Dynamic

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How do you find the right employees for your organization? A panelist of leaders in the manufacturing industry shared their struggles and successes with the ever-changing workforce.

Panelists:

Jon Kinning, COO, RK Mechanical, Inc.
Kim Madigan, CEO, AdamWorks
Bill Newland, CEO, Hercules Industries
Kevin Fink, CEO, Ice-O-Matic

Moderator:

Bart Taylor, Founder/Publisher, Company Week

Next month, we’ll bring you these panelists’ insights on education and technology advancements.

 

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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 financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



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Hometown Perspective: St. Louis

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Tom Chulick, Chairman and CEO of UMB St. Louis, gives his point of view on the uniqueness of banking in St. Louis. He also talks about the benefit of having a long-term relationship with your financial institution that involves diversification and risk management.

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Mr. Chulick joined UMB in 2007. As Chairman and CEO UMB-St. Louis and President, Midwest Regions UMB (including St. Louis, Greater Missouri, Kansas, Oklahoma and Omaha), he oversees all activities and lines of business for the financial service company in the St. Louis market. He has 29 years of experience in the financial industry. Prior to joining UMB, he served as Senior Vice President and Private Client Advisor at Bank of America. Mr. Chulick earned a Bachelor of Science degree in Business Administration from Rockhurst University.



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Top 10 Market and Economic Variables to Watch…and 3 to Ignore – Part I

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At its core, investment management involves researching thousands of variables and data points. Careful analysis is required of all of these variables and data points to create a “mosaic of information” in order to draw a conclusion on market and economic directions. With the 24/7 news cycle, investors have more data, surveys and reports in front of them than ever before.

In the spirit of a classic David Letterman Top Ten, we’ve put together our own list, but with a twist at the end. KC visited The Street and The Hays Advantage on Bloomberg Radio to share his insights.

Watch…

ListenKC Mathews on the Hays Advantage

Below are the first two market and economic variables to watch in order to make sound decisions. In the next parts of this series, we’ll bring you more variables and three that perhaps, should be ignored. Let us worry about the rest of the noise.

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10. Earnings Momentum

We are fundamental investors and believe that the primary driver of equity prices is earnings. Regardless of short-term noise that may move markets, sooner or later earnings and earnings momentum will determine market direction.

There is a 77 percent positive correlation between earnings and equity prices. Occasionally you will see equity prices deviate from earnings growth due to various reasons. Since 1955, however, earnings have grown 6.5 percent annually, and the S&P 500 has increased about the same, growing 7 percent on average. In 2014, earnings were up 5 percent and valuations increased by 25 percent, resulting in the S&P 500 posting a 32 percent return.

We expect earnings growth to be in the 4 to 6 percent range this year and continue to expect positive returns in equities. We would not be surprised, though, if we experience a meaningful correction to get earnings and market performance back in line.


9. High Yield Spreads

High yield spreads will usually precede or confirm a material correction in the equity market.  We define a material correction as a decrease of 10 percent or more and haven’t seen this type of a correction since June 2012. Market corrections are a normal and healthy part of a secular bull market. As the domestic equity markets continue to increase, the probability of a meaningful correction also increases. Historically, changes in high yield spreads have either signaled or confirmed a correction in the equity market. For example, in early 1998, high yield spreads widened 65 basis points suggesting an oncoming correction. As expected, a 15 percent mid-year correction followed.  Again, spreads widened by 90 basis points in the summer of 2007, right before the peak of the S&P 500.

In the past two years we have seen smaller corrections ranging from 4 to 7 percent with virtually no widening of high yield spreads. This tells us the meaningful correction has not yet occurred, nor is a correction on the near-term horizon.

Remember to check back for the rest of the variables to watch (and ignore) next month!

 

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.

DISCLOSURE AND IMPORTANT CONSIDERATIONS:

UMB Private Wealth 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. Banking and trust services offered through UMB Private Wealth Management, a division within UMB Bank, n.a.

This report 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 Private Wealth 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 Private Wealth 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 Private Wealth Management does not guarantee that it is accurate.

All investments involve risk, including the possible loss of principal. This information is not intended to be a forecast of future events and this is no guarantee of any future results. Neither UMB Private Wealth 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.

*Securities offered through UMB Financial Services, Inc. member FINRA, SIPC, or the Investment Banking Division of UMB Bank, n.a.

Insurance products offered through UMB Insurance, Inc. You may not have an account with all of these entities. Contact your UMB representative if you have any questions.

Securities and Insurance products are:

NOT FDIC INSURED * NO BANK GUARANTEE * NOT A DEPOSIT * NOT INSURED BY ANY GOVERNMENT AGENCY * 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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A smooth road to retirement

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Are you ready to begin the next stage of your life? Retirement is still an option despite the current slow-growth economy. If you’re considering or approaching retirement, there are several items to keep in mind when nearing this important milestone. If you are planning to leave the working world in the next 18 to 24 months, here are a few considerations in the current economy:

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  • Understand your actual timeline.

    Your “time horizon” may be longer than you realize. Life expectancy is also a big factor. A retirement date is an initial benchmark, but you need to keep in mind that your money can still “work for you” while you are enjoying your newly discovered free time.

  • Make sure to have a cash reserve.

    You should build up a reserve large enough to carry you through six to 12 months of retirement expenses. This can provide a cushion in case of an unexpected downturn or a major unplanned expense.

As markets can vary year to year, those with more than two years until retirement can plan for either situation in the following ways:

  • Increase contributions.

    Invest extra cash. Consistent dollar-cost averaging can help reduce the worry of when and how much to invest. You may also want to direct some of those extra contributions into a cash reserve, just in case of unexpected declines.

  • Diversify, diversify, diversify.

    Don’t put all your eggs in one basket. Throughout market cycles, different classes, styles and assets with diverse market capitalizations perform differently. Actively managing your portfolio diversification can have a greater impact on performance than individual investments.

Most of all, flexibility and patience are virtues in the world of portfolio management.  Don’t fall in love with a retirement date, and don’t be frustrated with market activity. If you have questions or concerns, it may be advantageous to seek the advice of an experienced professional.

Professional advisors can offer objective, educated and customized guidance. They are also an objective and knowledgeable resource that can provide a valuable perspective. While an advisor may not be able to provide every person with the news they want to hear, a good financial advisor can help maximize and leverage the assets individuals have against their personal timelines, risk tolerance and goals.

 

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.


Mr. Diederich serves as managing director of portfolio management. He is responsible for managing the portfolios of high net worth clients and select institutional relationships. He joined UMB in 2003. Mr. Diederich earned a Bachelor of Science in Finance from Missouri State University in Springfield, Mo., and a Master of Business Administration from the University of Missouri – Kansas City. He is a Certified Financial Planner®, a member of the Financial Planning Association and has more than 15 years of experience in the financial services industry.



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GDP Goes Hollywood

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Did you know that every five years the statistics that determine the Gross Domestic Product (GDP) are reviewed and modernized as the U.S. economy changes? The GDP is one of the main indicators used to measure the health of our economy, so this review is very important.

Earlier this month, the Bureau of Economic Analysis (BEA) conducted a comprehensive revision of the GDP statistics from 1929 through 2013. This time around, the revisions included changes to intangibles, including books, movies TV shows, music, photographs and even greeting cards. Specifically, “intellectual property products” (an idea for a movie franchise) were moved from expense to investment classifications. This includes research and development; entertainment, literary and artistic originals; and software. They will be considered fixed assets to account for their ongoing contributions, such as royalties authors receive for their book sales.

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Including specific works and ideas from the ever growing “knowledge economy” was done to fill a void because these intellectual property products had not been labeled as an asset until now. Check out this recent New York Times piece, Getting Creative with the GDP, to learn more about these recent additions to the GDP.

These changes are important in making sure the GDP calculation stays relevant and current.  Since the recent revisions created only a minimal statistical change to the GDP, the general consensus to date seems to be that the findings do not change the overall picture.

What it does change is the outlook on creativity and innovation. For example, research and development is often viewed by most companies as an expense and not an asset. It’s difficult to place a continuing value on it because sometimes it’s successful and sometimes it’s not. The goal is not to place a specific number value on each individual intangible. Instead this change in GDP reporting is a paradigm shift in how we view the overall value of imagination and the creative process.

 

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

 

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.


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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Easy Monetary Policy – “Morphine” for the Economy

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Quantitative easing. Low interest rate environment. Easy money. Kick the can down the road. We have all heard those phrases in recent years as the government continues its grand economic experiment in an effort to stimulate the economy.

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While the intention was to stimulate, I would argue that this continued easing has served as more of an “economic morphine” used to dull the pain of a slow-growth economic recovery desperately in need of surgery to repair years of unwise spending and unprecedented debt levels. This morphine has falsely propped up equity markets, pushed more risk into the system and created a lending environment where banks are throwing caution to the wind to create business. Though for many it feels like things are going well. That’s the morphine at work.

I recently talked with Reuters on the surge in commercial and industrial lending and the potential economic fallout. In the article, I emphasized the risks that some banks are taking as liquidity grows and the pressure and competition to make loans intensifies. With interest rates held historically low and liquidity high, many banks are willing to make riskier loans with little-to-no collateral, lax or reduced terms and collateral packages.

All this lending hasn’t led to economic expansion, but rather refinancing. The credit is simply moving from bank to bank. For those not refinancing existing debt, many are using these loans to replace equipment with near zero cost money.

At UMB, we continue to lend and believe in the strength of the private sector and the good of capitalism. We will continue to be prudent in our lending practices and maintain the necessary terms and standards for responsible lending. As a nation, we can no longer accept the morphine and avoid the reality of our economic situation. The time has come for surgery. This surely will be a painful process as rates normalize and necessary spending cuts are made. However, this is what is needed to ensure the long-term health of our economy and country.

 

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.


Mr. Kemper 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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