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953 Mount Hermon Rd. | Suite 101
Salisbury, MD 21804





CFS Commentary

Hear from the financial professionals of CFS as they share investment insights and market commentary.  

CFS Spring 2018 Newsletter












It is our continuous goal to safeguard your finances and personal information. As such, we would like to make you aware that the IRS has received numerous reports around the country of scammers sending a fraudulent IRS CP2000 notice for tax year 2015. The notice appears to claim a discrepancy between income reported by an employer and the taxpayer's income tax return. In addition to soliciting money, these emails may potentially be used to infect victims' computers with malware. Currently, the scam is being investigated by the Treasury Inspector General for Tax Administration.
The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. These fraudulent notices are being sent electronically, even though the IRS does not initiate contact with taxpayers by email or through social media platforms. Taxpayers and tax professionals who receive this scam email should forward it to phishing@irs.com and then delete it from their email account. Please do not reply to the email, open any attachments or click any links. If you receive a CP2000 in the mail and doubt the legitimacy of its content, we urge you to call the IRS at 1-800-366-4484 to confirm the legitimacy of the matter.  
As always, please do not hesitate to contact us if you have any questions or concerns regarding the above information. 
We are here to help protect your financial security!
The CFS Group

Disclosure:  securities and advisory services offered through Cetera Advisors LLC, Member FINRA / SIPC.  CFS is independent of Cetera Advisors LLC. 
Investors cannot directly invest in indices.  Past Performance does not guarantee future results.  


January 2016
Market volatility makes all of us uncomfortable, but unfortunately it is part of the normal investing cycle. The S&P, Dow, and Nasdaq all had market corrections (a drop of 10% or more from recent market highs) last year. That volatility has continued into the new year as we had one of the worst opening weeks  in a decade for the U.S. markets. Remember, one day, week, month OR EVEN YEAR does not define an investing cycle.
Though often asked, we do not know what the short term brings - too many variables.
  • By many measures the U.S. economy is healthy – perhaps not roaringly robust – but healthy.  All numbers are subject to interpretation, but:
    • Growth has been steady. 
    • The unemployment rate is the lowest it has been in 7 years.
We believe the current state of the economy does not point to a recession or therefore a bear market.   Some criteria that could point to a bear market include:
  • Negative growth of the economy (NO) – The U.S. continues to grow above 2%.
  • Spike in commodity prices (NO) – Commodities have been falling over the last year and a half.
  • Aggressive Fed tightening (NO) – The Federal Reserve has been very cautious about raising interest rates.
  • Extreme stock valuations (NO) – Valuations, in general, are hovering around historical averages.
Your long term goals are our benchmark for success, not the S&P 500 or Dow Jones Industrial Average. We recommend staying invested and maintaining a broadly diversified and balanced portfolio.
We live in a global world and there are many forces at work that can derail investor confidence.  Try to filter out the media noise and stay true to your long-term investment approach. 
We are ALWAYS available to discuss your concerns, answer questions or review your portfolio.  Never hesitate to contact us. 
Thank you,
The CFS Group

Disclosure:  securities and advisory services offered through Cetera Advisors LLC, Member FINRA / SIPC.  CFS is independent of Cetera Advisors LLC.  Investors cannot directly invest in indices.  Past Performance does not guarantee future results.


Rising Interest Rates and Your Portfolio
July 2015
In fear of what is considered an inevitable rise in interest rates, many investors are beginning to speculate whether or not fixed income still has a place in their portfolio.  (Note: In general, as interest rates rise the price of existing bonds declines)
It may be hard to remember that we have been through such periods of rising rates before.  Below illustrates previous periods when the Federal Reserve System increased the benchmark Federal Funds Rate:  (See footnote for explanation of Fed Funds Rate)
  • 1991: Increased from 3.25% to 6.0%
  • 1999: Increased from 4.75% to 6.5% in less than a year
  • 2004: Increased from 1% to 5.25% (mid-2003 to mid-2006)
Fixed income (as measured by the Barclay's Aggregate Bond Index) had an annualized return of 5.17%, 6.01%, and 3.98% respectively during these periods. These returns may seem somewhat modest, but they're a far cry from the catastrophic scenarios the doom-and-gloomers would have you believe.
Remember, there is always risk of an unforeseen pull back or recession in the marketplace.  In such situations, fixed income has historically proven to limit losses.  A rise in rates will impact the fixed income portion of your portfolio, but it is unlikely to be categorically detrimental. What can be detrimental is letting the fear of rising rates cause you to abandon fixed income and take on more exposure to equities than is suitable for your particular tolerance for risk. 
Never hesitate to call us with questions or concerns or to review your portfolio.
Respectfully yours,
Mark. E. Engberg, CFP®
[Footnote: The Federal Funds Rate is known as the overnight lending rate and is the interest rate that banks actively trade cash balances held at the Federal Reserve.  Banks with surplus balances lend those funds to banks in need of balances or reserves.  The current Fed Funds Rate is approximately 0.13%.  http://www.federalreserve.gov/releases/h15/current/ ]




IRS SCAM Warning
June 2015
We have received several calls from concerned clients because they have received a threatening call from the "IRS". THIS IS A SCAM!!!
The IRS will never  contact you by phone or email.  All IRS correspondence will come by mail.  These fraudulent calls have threatened many taxpayers with property seizure, driver's license revocations and arrest.  The callers are savvy and speak with intimidating authority, but DO NOT give out any personal information - hang up immediately.
You can report this incident by calling 1-800-366-4484 or at www.tigta.gov. you may visit the IRS website at the link posted below for more information.
As always, call us with any questions or concersn.
We are here to help protect your financial security!



Published in 1996, This book sold over 2 million copies.  Tragically its author, Thomas Stanley, recently died in a car accident at the age of 71 (1944-2015).  What this book revealed is that most millionaires share SEVEN KEY TRAITS:
  1. They live well below their means
  2. They allocate their time,  energy and money efficiently in ways that help build wealth
  3. They believe financial independence is more important than social status
  4. Their parents did not finance their lives
  5. Their adult children are economically self-sufficient
  6. They target market opportunities that fill a need
  7. They choose the right profession
Being a millionaire is NOT the point, but having a secure financial future is.  As financial planners and investment advisors, too often we see clients putting their long-term financial security at risk by overspending, under-employment and / or acting as a financial crutch for adult children.  We all want to enjoy a high quality of life, but at the same time we must remain responsible, prudent, creative and proactive to help assure we avoid financial hardships.  It's a challenge, but one worth building your life around.
Revisiting the SEVEN KEY TRAITS seems timely with the passing of Mr. Stanley.  The book offered a simple and clear message in 1996 that holds true today.






Volatility is Normal
May 2014

The exceptional investment returns for 2013 are still fresh in investor's minds, however, we must remember last year was the exception, not the norm.  U.S. equity markets have struggled to find a direction year-to-date, and going forward,  investors should not be surprised by mean reversion in both annual returns and volatility.

As shown in the chart below, the maximum drawdown so far this year was 5.8%, equal to the largest pullback in 2013, but well below the average since 1980.  Although equity markets saw stellar returns last year with minimum variance, investors should expect more normal levels of risk and return in 2014.  

Source: Standard & Poor's, FactSet, J.P. Morgan Asset Management.  (May 19, 2004)



Where do our Tax Dollars Go?
April 2014
The April 15th tax filing deadline is passed – and most of us have “settled up” with Uncle Sam.
Well, how will the federal government actually spend your “contribution”.
Your Social Security payments are easy; they go to pay Social Security benefits to current retirees, and for now, they fully fund that obligation.  (The future is another matter.)  Some of the Social Security payments also go to cover a portion of Medicare's expenses; the remainder of which are covered by general federal revenue.
How about the rest?  (The following breakdown is of course approximate and open to interpretation):
Your income taxes are divided among several broad budgetary categories:
  • the military (27%) and military-related veteran's benefits (5.1%)
  • various forms of healthcare for U.S. residents (22.7%)--  including the remaining Medicare costs plus Medicaid
  • interest on Uncle Sam's debt (13.9%) --paid out to Treasury bill and bond holders.
  • Unemployment benefits (9.8%)
  • Everything Else:
    • running the government (4.5%) -- including various agencies such as the FBI and immigration services
    • housing programs (4%) -- community development and block grants,
    • education (2%)-- programs like Head Start, and  Pell Grants for college students.
    • scientific research, international affairs, transportation and energy (<2%)

This graph also helps to break down how your tax money is spent:



If you'd like to get a receipt from the government for your taxes paid, which itemizes how that money is spent, well, good luck petitioning the IRS. But you can get a fairly accurate receipt from the National Priorities Project here: http://nationalpriorities.org/interactive-data/taxday/.  Just type in this year's tax payment from your 1040, find your state, push a button and you'll see what you paid for in terms of government services, interest and overhead.  Depending on how you feel about our government spending priorities, it may make your tax experience more or less painful.



Heartbleed Security Vulnerability
April 2014
You have undoubtedly heard the warnings regarding the latest Internet security threat, the Heartbleed security vulnerability.  We want to assure you that the privacy of your data and information is extremely important to my firm and to the broker-dealer I do business with, Cetera Advisors.   Upon learning of this threat, Cetera promptly evaluated all of its servers and technology for the Heartbleed security vulnerability. The good news is that they have determined it is not running an affected version of OpenSSL, and thus was not susceptible to the vulnerability.  None of the systems supporting or storing your data have been affected.  
We have also been in contact with our third-party technology providers, including our clearing firm Pershing®,  and have determined, at this point, all are either not affected or have applied patches to address the vulnerability.
Of course, there are always things you can do to help ensure the protection of your personal information, regardless of what Internet threat is lurking.  As a best practice, you should change your passwords frequently, and not use the same password across more than one Internet application. 
Please don't hesitate to call if you would like to further discuss any questions or concerns.
Thank you,
Comprehensive Financial Slutions




Annual Returns and Intra-year Declines
March 2014

Dear Client and Fellow Investor,

With the stock market near all time highs, there is talk about the sustainability of this run up.  It is important to always take a step back and keep things in perspective.  When building an investment strategy, by definition, you should consider protection first and promotion of growth second. As the risk appetite begins to increase keep the chart below in mind.  The markets have generated an intra-year drop on average of 14.4% - this correction can happen in positive years and negative years.  The big picture needs to focus on keeping your strategy in check and avoiding speculation - our process involves staying balanced and rebalancing.  At the end of the year riding all the highs of the market will not mean a much if you give it all back.

If you have any questions or would like to discuss your portfolio, feel free to contact me.  Remember, you can schedule a time to speak with me by clicking on the button “Schedule a Phone Call” located below. 

Thank you,

Mark E. Engberg, CFP® 







Quick Tips

2014 Social Security Benefits

Dear Client and Fellow Investor,

You've worked a lifetime for this valuable benefit and deciding when to take Social Security benefits can be complex and confusing. 

If you are approaching age 62, let's discuss your options.  We have the tools, knowledge and resources to help you make well informed decisions, maximize your Social Security income and protect your spouse. 

Quick Tips: 2014 Social Security Benefits

Social Security recipients are getting a raise – but not much of one: Next year, the average monthly Social Security payment will increase by $19 due to a 1.5% cost-of-living adjustment, one of the smallest annual COLAs in the program's history.  Since 1975, only seven COLAs have been less than 2%. Four of these seven COLAs have occurred in the past five years, however. The 2013 COLA was 1.7%.

Maximum possible benefit grows: The maximum possible benefit a retiree can claim at full retirement age in 2014 is $2,642, up from $2,533 in 2013.

The wage base for Social Security is rising: Most workers will pay 6.2 percent of their earnings into the Social Security system until they reach the maximum taxable amount of earnings. The wage cap will increase from $113,700 in 2013 to $117,000 in 2014.  About 6 percent of working Americans will pay more Social Security taxes in 2014 as a result of this change.

So is Social Security's annual earnings limit. This limit is only faced by Social Security recipients who have yet to reach the month in which they turn 66. In 2013, retirees younger than 66 were able to earn up to $15,120 before having $1 in retirement benefits temporarily withheld for every $2 above that level. In 2014, the annual earnings limit rises to $15,480. Social Security recipients who will turn 66 next year can earn up to $41,400 in 2014; if their earnings break through that ceiling, they will have $1 of their benefits temporarily withheld for every $3 above that level. Once you get to the month in which you celebrate your 66th birthday, you can earn any amount of income thereafter without a withholding penalty.

For more information related to Social Security Changes for 2014, visit the Social Security Administration Website: http://www.ssa.gov/pressoffice/factsheets/colafacts2014.html

Please contact us and let's begin the discussion. 



Affordable Care Act (ACA)



Dear Clients and Fellow Investors,

 If you are under age 65 (Medicare eligibility age) and need healthcare, circle October 1st on your calendar.  This date marks the start of open enrollment in the new state-based health insurance exchanges created under the 2010 health care overhaul (“Obamacare”).   This marks a major change to health insurance in the Unites States.  We believe it is important that you understand the potential effects of this legislation on your individual health care choices.

Some Highlights:

  • For the first time, many consumers will have access to comprehensive health insurance regardless of health status.
  • Workers and early retirees offered only “skimpy” or no employer medical plans can shop for their own coverage on the exchanges. 
  • In many cases, not all, the cost of this insurance is subsidized by tax credits. 
  • Some, not all, current plans will be affected.
  • The types of plans offered in the state-based health insurance exchanges will be categorized as:

(Note: the more the plan covers, the higher the premium cost) 

o   Bronze – covers at least 60% of costs

o   Silver – covers at least 70% of costs

o   Gold – covers at least 80% of costs

o   Platinum – covers at least 90% of costs

·         Coverage will begin January 1, 2014, when most people are required to have medical insurance or pay a penalty. 

Some useful resources:

  • To help you navigate the state-based exchanges, the Kaiser Family Foundation has created a comprehensive site called “Marketplace Profiles:  http://kff.org/state-health-exchange-profiles/
  • Exchanges will have “navigators” to help consumers prepare applications
  • If you are enrolling, consumers nationwide will complete a single standard application found at the Centers for Medicare & Medicaid Services website: http://www.cms.gov/cciio/
  • CFS Insurance Specialist, Andy Benjamin, is available to help.  He has been busy educating himself on the options available.

This brief communication is intended to give you a broad overview of the new health care program and point out various resources that might assist you.  We understand this legislation has been, and continues to be, politically charged – we are not taking a position for or against it, but apparently it's here to stay.  As with any insurance program, the information can be confusing and complicated, but if you need assistance, feel free to call us.  We will assist as appropriate or direct you to a professional that might be better suited help you. 

Disclaimer:  This is NOT intended to be a comprehensive analysis of the ACA.  Different states are taking different approaches, there are still unknowns regarding final implementation, there have been some delays in implementation of certain elements of the Act; and the choices/options available to each person or family will depend on many factors.


Certain Advice for Uncertain Times

Dear Client and Fellow Investor,

We understand that market volatility can be unnerving and lead to anxiety.  However, we view the current market correction as a normal intra-year event which creates opportunity to reposition portfolios. Keep this comment by Warren Buffet in mind when thinking about the market in general.

The 20th Century saw two world wars, multiple recessions, assassinations, the resignation of a disgraced president, oil shocks, hyper inflation, terrorist attacks and so on.  Yet the Dow rose from 66 to nearly 11,500.”

Over the short term, economic and political events may cause stocks to go down.  But over the long term, the American economy is strong and resilient, which causes stocks to go up.  Pessimists tell us to stay out of the market, but these doomsayers have a lousy track record at predicting the future.”


Source: The Bottom Line, Summer 2013 issue, Warren Buffett's Certain Advice for Uncertain Times

If you have any questions or would like to discuss your portfolio, feel free to contact me.

Thank you,

Mark E. Engberg, CFP® 




Online Tool: My Social Security


Your personal online mySocial Security is a valuable source of information beginning in your working years and continuing throughout the time you receive Social Security benefits.  

For those considering retirement, this online tool allows you to review your earnings record and receive an accurate estimate of your Social Security benefits.  These benefits are an important part of your overall retirement income; we advise working with a financial professional to help assure you are making the best choices for you and your family.  

Follow this link to create an account: http://www.ssa.gov/myaccount/