The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
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Welcome to The Flinchum File

I am an Accredited Investment Fiduciary at Bay Capital Advisors, an investment firm headquartered in Virginia Beach, VA. After retiring from Truist Bank, I started this firm to work more closely with a smaller number of clients, and it has been great! Our client load is about 25% of the national average.

Writing is not for the shy or the meek. It exposes a person’s mind and character. I hope you enjoy the view.

The opinions expressed in The Flinchum File are those of the writer, Jim Flinchum, and do not necessarily reflect those of Bay Capital Advisors, LLC

Education Exercise

There are many ways to spend time, without watching well-meaning windbags pretend to debate each other.  Last night, when changing channels, I landed on such a “debate.”  During the five seconds required to enter another channel number into my remote, I heard one windbag suggest that community college should be free.  I remember thinking “fat chance” before that windbag was gone. Four or five commercials…

Mixed Signals

Sparing you the many details, the relentlessly positive economic data over the last few years has taken a turn during the second quarter (Q2).  The first look at Q2 GDP growth will not be available for another three weeks, but I expect it to be substantially less than Q1 growth rate of 3.1 percent, which was skewed higher by inventory build-up ahead of the tariffs. …

Retirement Income

So, you have searched your soul, looking for the real reason you think you want to retire . . . And, you have verbalized your thinking to a trusted loved one, giving airtime to both your thoughts and their thoughts . . . And, you have prepared a budget for a good economy and another for a bad economy . . . Now, you want…

Propped-Up ?

It seems like a long time since December, which was the last time the Fed raised interest rates.  The stock market promptly had a “hizzy-fit” (whatever that is?), and the President began threatening to fire the Chairman of the Fed.  This week, the Fed had its normal policy meeting and strongly suggested it would cut interest rates at the July meeting.  Wall Street loved it! …

Rise of Populism?

You’ll recall the President’s famous boast that he could shoot somebody in the middle of Fifth Avenue and not lose a single member of his “base.”  That was an interesting comment, and I started thinking about the origin of his base.  At first, as a student of Hillbilly Elegy, I thought it was logical that the millions of people who were victimized by globalization and…

The “Real” Number

Ever since Lou Eisenberg wrote The Number in 2006, those thinking about retirement have focused on the one big magic number that will take care of them the rest of their lives.  How big a “nest-egg” is big enough?  Unfortunately that number is income-focused.  You don’t know if any number is big enough, if you don’t really know your expenses.  Your nest-egg is big enough only…

Exercise

As people contemplate retirement, they often go to a bank broker to see if they will be prepared for it, financially.  The broker will plug a few numbers into his laptop and tell you the odds or probability that you will be prepared, measured to two decimal places, such as a 72.84% probability, for example.  This is called a Monte Carlo analysis, and it is…

The Fundamental Flaw

Supply-side economists argue that tax revenues will increase if you cut tax rates.  Since passage of the Trump tax cut, revenues have indeed increased . . . a whooping 2%.  Unfortunately, expenses or spending increased 9%, primarily for federal retirement and health benefits, the military, and interest payments on the national debt.  (Notice that only government workers received increased entitlements.)  After some accounting adjustments, our…

Offshore Crooks

Every profession has its crooks and charlatans, even doctors, lawyers and Indian chiefs.  In financial planning, I trust nobody who deals with offshore asset protection trusts. Originally, they were used to protect assets from ex-wives or creditors or the IRS.  Of course, the way to accomplish this was to transfer title or ownership of those assets to somebody else, who was then free to do…

Retirement Choice ?

There are many reasons to retire.  You might retire for health reasons, or you might retire because you already have plenty of money.  You might retire because you want to do charity-work.  I think most people retire, because society expects us to WANT to retire.  Why do you want to retire?  Who told you that?  Not all retirements are successful.  How will you retire from…

Bad News = Good News

Yesterday’s employment report was considered bad news, as only 75 thousand jobs were created in May, while 180 thousand had been expected.  Bad News!  So, why did the Dow rise 263 points?  Because that increases the probability that the Fed will cut interest rates.  Clearly, the market believes that short-term interest rates – the only interest rates directly controlled by the Fed – are too…

Anomaly #2

We recently noted the unusual under-performance of small-cap stocks, which were getting trounced by large-cap stocks this Spring.  Now, we look at the two ISM Indexes and see continued growth in the services sector, as well as employment, but a sudden slowdown in manufacturing.  It is still increasing but only barely.  Obviously, the new tariffs are one cause, and other causes are not readily apparent. …

A Little Good News

Did you notice?  A little bi-partisanship has broken out in Congress!  It can happen!  Dogs and cats can get along, after all.  Who knew? The cause is an interesting re-alignment going on.  Historically, we have viewed our leaders as “right or left” or as Republicans or Democrats.  That may be changing to globalists or nationalists.  The new bi-partisan hearings are a joint effort of Republican…

His Way or The Highway

When I was a boy, my parents forced me to wear nice clothes every Sunday morning to attend Sunday School and Church.  They taught me the key to life is what you believe. When I was in college, my professors insisted that I learn more about things I care little about.  They taught me that key to life is how much you know. When I…

Anomaly

Looking at the global markets this year, there is one anomaly worth pondering.  Since the early 1990’s, the benefits of globalization have largely accrued to the large companies.  Two years ago, 52% of total revenues for the large companies were derived from international sales.  Therefore, one can assume large cap companies would be more sensitive global slowdowns and less sensitive to internal recessions. That ain’t…

Our Turn

Now that my hometown has joined the “Mass-Killing-of-the-Month” Club, I feel the need to comment, both as a native-son and as a “gun-lover”. First, we already have enough guns.  We have less than 330 million people, including children and infants, but over 375 million guns.  How many do we need anyway?  Plus, we manufacture over a million new guns every year. Second, the Second Amendment…