By Maurice Stouse
Branch Manager and Financial Advisor
Sitting in the office of Santa Rosa Beach architect Jeff Margaretten, you might happen to hear a few thoughts on how things could change in various parts of the economy when solving for the last mile. The term came in to use some time ago as it spoke to what the last thing was to get done, to physically do it, when making things happen that have a lasting effect in the economy : The last mile of cable to connect a community to cable tv or perhaps the internet. The last mile of train track or the last mile of road as other examples. It is commonly a far and expensive reach.
Jeff often thinks about how certain “last miles” could change the world or perhaps sectors of the world. Take electric cars for example. Recharging stations are far from ubiquitous and recharging an electric vehicle takes a lot more time than filling the car with a tank of gas. He wonders, for example, if diners while out to eat could simply plug in their cars, which are in the parking lot while they eat. Once they are done for the evening, their car has been charged and it was with little effort. It was done in their leisure time. Solve for that, as in this example, and the whole world changes. You can think of a lot more examples in technology, with 5G, in health care, with cancer. Or perhaps with fitness and weight loss.
What is the implication for investors? Think about electricity generation and where that comes from. Think about the need for cleaner burning fuels and renewable sources. The most common today is natural gas (currently seen as cheaper, cleaner and abundant). Wind and solar are two more. As a matter of fact, electric utilities are continuing to consume less coal and replacing that in direct proportion with natural gas, wind and solar.
The energy sector in the stock market would be an area that investors might want to investigate if they see the possibilities of the whole world changing. Investors should take note that the energy sector just turned in the lagging performance of all 11 sectors of the market over the past five years. Some investors might see this as an area to avoid because of the relative under-performance. Others might take a contrarian approach and see it as undervalued (cheaper) relative to the possibilities within the sector. To see if this might work for part of your investing strategy, do further research or visit with a financial advisor to learn more about it all.
Maurice Stouse is a Financial Advisor and the branch manager of The First Wealth Management and Raymond James and he resides in Grayton Beach. He has been in financial services for over 32 years. His main office is located at The First, First Florida Bank, 2000 98 Palms Blvd, Destin, FL 32451. Branch offices in Niceville, Mary Esther, Miramar Beach, Freeport and Panama City. Phone 850.654.8124. Raymond James advisors do not offer tax advice. Please see your tax professionals. Email: Maurice.firstname.lastname@example.org.
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Views expressed are the current opinion of the author and are subject to change without notice. Information provided is general in nature and is not a complete statement of all information necessary for making an investment decision and is not a recommendation or a solicitation to buy or sell any security. Past performance is not indicative of future results. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs. Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time. Investing always involves risks and you may incur a profit or a loss. No investment strategy can guarantee success.
Holding stocks for the long term does not insure a profitable outcome. Diversification and asset allocation do not ensure a profit or protect against a loss. Every type of investment, including mutual funds, involves risk. Risk refers to the possibility that you will lose money (both principal and any earnings) or fail to make money on an investment. Changing market conditions can create fluctuations in the value of a mutual fund investment. In addition, there are fees and expenses associated with investing in mutual funds that do not usually occur when purchasing individual securities directly. An investment in a money market mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although it seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. A fixed annuity is a long-term, tax-deferred insurance contract designed for retirement. It allows you to create a fixed stream of income through a process called annuitization and provides a fixed rate of return based on the terms of the contract. Fixed annuities have limitations. If you decide to take your money out early, you may face fees called surrender charges. Plus, if you’re not yet 59½, you may also have to pay an additional 10% tax penalty on top of ordinary income taxes. You should also know that a fixed annuity contains guarantees and protections that are subject to the issuing insurance company’s ability to pay for them. Investing in the energy sector involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors.