Skip to content

The Extra Five Commandments

January 29, 2019

This past Saturday Jews that attended Synagogue all over the world heard The Ten Commandments read from the Torah (Exodus chapters 18, 19 and 20). For some reason a glimpse entered my mind about the Mel Brooks movie where he played Moses carrying three tablets representing the Commandments and dropped one as he was about to say fifteen and changed it to “ten commandments.” If there were fifteen, what would the extra five have said? Here are some suggestions:

11. Be nice, courteous and respectful of others. In Exodus 18:14 Jethro asked Moses, his son-in-law, why he is having all the people stand waiting to see him? The placement here, before The Ten Commandments, could indicate that good manners should come first.
12. Teach your children about God. Exodus 19:3 refers to the “house of Jacob.” This has been interpreted to be synonymous with the wives and mothers who keep the house, determine the spirit of the family and oversee the children’s education. This was in the Torah before God spoke The Ten Commandments. Children are our sureties and we must teach and pass on to them the right values.
13. Protect and care for your children and brethren. Exodus 19:4 “I bore you on eagles wings…” As a lesson, eagles protectively care for their young as God did, does and will do for all of us. Brethren includes less fortunate people that we should also be concerned about.
14. Bless God: Exodus 18:10 has the first blessing to God. We are commanded to love and fear God, but nowhere are we told to bless God. This is not such a bad idea. We do bless God by our daily actions done in a manner we should be proud of.
15. Treat others as you would like to be treated. Leviticus 19:18 is the first rendition of the Golden Rule. We should always act in a way that we would also like to be treated.

I can probably come up with more, but these extra five seem pretty good if we would all follow them.

Postage increases effective January 27

January 24, 2019

The following U.S. Postal Service 2019 price increases take effect Jan. 27. You can buy forever stamps until Saturday at the current prices. Comment: the letter rate increase is 10% and seems high based on the last few increases. However, in 1932 the 2¢stamp increased to 3¢ and in 1958 the increase was to 4¢ and then in 1963 to 5¢ and so forth. Those percentage increases were 50%, then 33.3% and 25% and continued on at lower percentages. 10% is not so terrible if it stays that way for a while. Also the additional ounce rate dropped from 21¢ to 15¢ making a 2 ounce letter a penny cheaper than before and heavier envelopes even lower. The USPS is attempting to simplify the postage rates for noncommercial customers that typically use stamps and feel that making all the rates divisible by 5 will help.

Here is a partial list of the most common rates. Post this for future reference.

  • First-class forever stamps will increase from 50¢ cents to 55¢ cents.
  • The first ounce of metered mail or stamps printed-on-line goes from 47¢ to 50¢.
  • The additional ounce rate mail drops from 21¢ cents to 15¢. This applies to stamped and metered mail.
  • Large envelopes up to one ounce remain the same at $1.00 [not 2 stamps – this is a dime less than two stamps. A suggestion is to use one forever stamp and three additional ounce stamps – this can get a little nutsy but if you typically mail large envelopes you should do it right].
  • The additional ounces for this are the same as for letters – 15¢.
  • Post cards remain the same at 35¢.
  • Media mail up to 1 pound increases very little from $2.66 to $2.75 while a 5 pound package increases to $4.83 from $4.70.
  • International letters up to 1 ounce and postcards remained the same at $1.15.
  • Priority Mail regular flat rate envelopes increase to $7.35 from $6.70. Note that there are commercial base rates that are lower for volume users. Priority express goes up to $25.50.
  • There are other increases for Priority Mail flat rate larger envelopes and boxes and Priority Express that need to be checked out. There are also increases for packages and larger size mailing pieces, media mail, commercial rates, base pricing and mail requiring reduced services by the Postal Service. All of these need to be checked out if they apply to you.
  • First class mail can be sent up to 15 ounces. This is a maximum of $3.10 for a large envelope. 16 ounces and over will need to be sent using priority mail.
  • There will be a 70¢ surcharge per piece for nonmachinable mail. You will need to find out what this means when you want to mail something bulky in an envelope.

One way to beat the increases is to buy discounted postage stamps. Go to any stamp dealer or to and search for “discount postage” and you can find older stamps at discounts upwards from 25 percent. A word of caution is that packages with postage stamps that weigh 13 ounces or more must be taken to a retail service counter at a post office for mailing.

Have fun!

Burying your head in the sand

January 22, 2019

The market did not do well last year. It also seemed worse psychologically because of the big drops in October and December. How did you do? I know many people that obsess over how well they did when the market is up performing analyses on their analyses; but when there are losses they seem to bury their heads in the sand. They don’t want to know because it annoys or upsets them. Wrong way to act!

Burying your head in the sand is a way to pretend that something did not happen or doesn’t exist; and hopefully it would go away. However, that doesn’t work in the real world. I think it is more important to know how you did when the market is down, to make sure that you are not continuing something that has you on a wrong track. You know how I feel – those with well thought out investment portfolios with broad based positions should stay the course. Nevertheless, they should review how they did to make sure they are not doing something they shouldn’t. Here are some ways to do this.

Most brokerage statements and investment managers provide information about portfolio gains or losses for the previous year. The question is, how did you do relative to the market? Your losses should be somewhat aligned with the major indexes. My charts posted on Jan 8, 2019 provide the 2018 losses for the four major indexes – the Dow Jones Industrial Average, S&P500, The Nasdaq composite and the Russell 2000. Based on the composition of your portfolio you should compare your performance with the appropriate indexes. Three indexes lost from about 4 to 6 percent and one, the Russell 2000 small cap fund, lost 12 percent. If your losses were in these ranges, then you did OK relative to the market. You still lost, but you are in the market and cannot expect gains every year. I am not factoring in gains or losses on bonds since the reason for investing in bonds should be for interest and not gains or losses. If you were in bond funds and lost, then shame on you.

Getting back to your stock portfolio. You also earned dividends, and that is part of your total return or would reduce your losses, but that is not the way to measure your performance. Compare the losses in stocks with the indexes and see how you did in that regard. If you lost more, then perhaps your portfolio is not as well rounded as you believe. Ditto, if you lost less and while you should feel good about the lower losses (or even gains), you should also consider whether you’ve taken on too much risk or if your positions can sustain itself going forward.

Keep in mind, i.e. never forget, that you should not be trying to make a killing, but rather have a portfolio designed to secure your future – both with asset AND cash flow growth. Check it out. Hopefully it isn’t, but just in case it is, take your head out of the sand and figure out what happened to you last year. It’s important. It’s VERY important to your future financial security.

Tricky Trends

January 17, 2019

ed nasdaq 1

ed nasdaq 2

I know that many people do not like to look at numbers, but I want to make a point and using these numbers is the only way I can. However, my discussion is short and sweet. The point I want to make is that graphs and numbers do not always tell the whole story or present the entire picture. However, the charts serve my purposes very well since they reflect the long term trends I want to illustrate to my financial planning clients.

Discussion of NASDAQ index (highlighted above)
The index began 2000 at 4069. On March 10, 2000 the index closed at its all-time high to that point of 5408. That is an increase of 32.9% in less than 2½ months. It then plummeted to end 2000 at 2471. Its downward trend continued to a low point of 1108 on October 10, 2002 but closed that year at 1336. The trends are there, but because of the measurement dates that I used which were the last day of each year, the full extent of the major swings and changes are not indicated.

Looking at the above graph it shows a high point at December 31, 1999 of 4069 while the high point was actually 2½ months later. Using the high of 5408 as the benchmark it took until early 2017 for that index to get back to where it was in 2000. Since then it kept going up, until it didn’t at the end of 2018.

The same thing happened in 2009 where these indexes hit low points in March, but those are also not reflected in the charts. As an FYI, the Dow Jones Industrial Average on March 9, 2009 hit its low point of 6509 and from there it catapulted upward. Neither the 2008 or 2009 ending amounts come close to that 6509 amount.

Takeaway: Make sure you understand fully and that the right beginning point and appropriate intervals are used in any data you review.

Additional comment: It appears from the above 22 year record that the growth in three of the four indexes was quite similar. Only the NASDAQ was much different. Also all of these indexes paid cash dividends during this entire period that are not reflected in the index amounts making the returns greater than shown above, or in the charts posted on January 8, 2019.

Withum #SOTF19

January 15, 2019


Yesterday Withum’s annual State of the Firm (SOTF) event was attended by about 1000 of our 1100 people – from the five offices in New Jersey, and from Boston, New York, Philadelphia, Washington, Orlando and satellite offices in Aspen and Chicago. As we did last year it was held at the NJPAC from 1:00 to 5:30 followed by a tummy filling two hour cocktail reception. It was also great for networking and catching up with colleagues we work and interact with but don’t necessary see in person. Last January I spoke at the brand new Orlando office and was able to talk with many of the people I met last year.

Bill Hagaman, our managing partner/CEO gave his report of the state of the firm which is really great. A lot is going on and while most of the attendees are not partners, the program was more of a report to shareholders along with updates on new services, innovative growth initiatives, key metrics (we completed a string of 44 consecutive years of revenue growth), and our very popular strength awards with 75 staffers being nominated. Their very extraordinary accomplishments were highlighted and awards were presented for Administrative Strength, Client Service, Community Service, Innovative Strength, Marketing, and Outstanding Achievement. I am proud to say I know most of the nominees and they are all winners! A special award, determined by Bill, was also presented for extraordinary special service to the firm.

Part of Bill’s presentation was a projection of the need for promotion to partnership during the next eight years which showed a wide window of opportunity for our bright energetic staff. Also announced were six promotions to partner effective July 1, 2019. Of the six, two started their careers with either Withum or a predecessor firm that merged into Withum. Each has exceptional technical skills along with fantastic client service abilities, great mentoring capabilities and all exemplify the Withum Way culture.

The program began with the latest edition of the SOTF19 video with over 200 Withum-ers in it. A highlight was a new Withum song that was written and sung by one of us along with talented accompanists. Watch it at click here. The program ended with a presentation from NY Times bestselling author Andy Andrews, author of The Traveler’s Gift with everyone receiving an autographed copy of that book. I look forward to reading it, but if it is half as good as his presentation, it will be a great read.

We are not an accounting firm, but a professional services firm providing assistance to clients in many of the areas they need help in. Primarily tax, audit and accounting services, but also in the very fast growing advisory, digital and cybersecurity services we have available, and in the over two dozen industries we have specialists in. Withum is a true catalyst for growth and success.

The state of our firm is great; the future appears great; the opportunities for staff and clients are numerous and great; and I feel excited and great to be part of it. You can find out more at #SOTF19.

Explanations of the 2018 year end charts

January 10, 2019

Last year the stock market’s activity can be broken into three parts. One part was a big run up in stock prices. The second was the quick and sharp drop during December. The third is whether the net annual results followed a “normal” trend of the year in toto. Here are some explanations.

  • While the stock market had a lot of action last year, the bond market was pretty quiet except for the Federal Reserve’s actions causing jumps in the short term Treasury rates. The long term rate, U.S. dollar and gold had minimal changes last year and not too great ten year changes. This shows stability in the markets. Some might call it stagnation or that there is not much growth. As far as I am concerned, stability is good. However, looking at these numbers does not seem to indicate the strong growing economy the Fed is suggesting. And if we don’t have indications of strong growth, it could portend some gloomy weather on the horizon. This small grouping doesn’t tell an entire story, but they are helpful in my discussions with financial planning clients – so in that regard they serve a valid purpose.
  • Sharp run ups create euphoria and an expectation they will continue. They are not normal, and there always will be some normalization. This normalization, and then some, took place is a two week period creating some alarm, but based on the people I spoke with, there was inaction, so while portfolios gave back its gains over the last year and a half, there did not seem to be any panic selling. I’ve written plenty about staying the course of your investment plan and the sudden drop did not look like it was anything so terrible to cause an abandonment of well thought out plans.
  • The 2018 drops in the top three indexes and the double digit drop in the Russell 2000 when looked at through a 365 day lens should not cause too much alarm. The markets cannot be expected to go up every year and over the last ten years we only had three down years and even these were not so terrible. What was terrible was its suddenness.
  • The ten year results for all four indexes were all exceptional. Three showed similar and very significant increases and the fourth was off the wall but it included the FANGs that went up significantly. The FANGs are Facebook, Amazon, Netflix and Google (Alphabet). The FANG prices seem to be primarily based on great expectations of future earnings rather than current or projected next year earnings.
  • The ten year results were great but they had a low starting point coming after the midst of the 2008/2009 market meltdown. However, the annual increases after then were also quite high and with small losses in the loss years, it seemed it would have been hard for anyone to have lost money in the market during the last ten years, no matter when they started. However, if they entered the market during the last few months of 2018, they would not be too happy right now. But people in the market should be taking a long term position on the future of the American economy and while their starting point hit a glitch, it should work itself out over the next seven to ten years.
  • This presents an argument about whether the stock market would actually reflect the economy’s growth. The P/E of the S&P 500 index with exception of some annual aberrations has been pretty steady during the last ten years as has been the DJIA. There doesn’t appear to have been any major changes in those index’ valuations. Further the dividend yields have been pretty consistent over all and the dividend payout percent seems to indicate some consistency. All of these indicate stability in the market and that the prices are driven somewhat by profits and dividends. This provides me with confidence in the market as of the present time.
  • This year I added the dividend payout percent. This indicates the percentage of earnings that are paid as dividends and looks to me like there is an upward drift in the dividends paid out. This is buoyed by the increasing profits and cash hoards by many of the larger companies. Last year’s corporate tax cut further increased the cash with many companies using the cash to buy back shares which serve to increase the P/E ratios because fewer shares end up being outstanding.
  • One comment about the American economy’s growth being reflected in the stock market: The stock market also reflects global economic activity since about 43 percent of the sales of the S&P 500 components are derived from outside the United States, so that index also reflects worldwide business activity. Because of this, I do not see the efficacy of balancing a portfolio by including foreign or emerging market funds.

I can go on with more, but I believe I’ve said enough to provide an understanding of the performance indicated by the charts. Obviously I like doing this. I also like presenting this explanation since it forces me, and hopefully you too, to really focus in on the results and how they might be used.

Enjoy the above. Thank you for reading my blogs; and I welcome your thoughts and comments, so email me at and include your phone number so I can call to discuss it with you.

Have a great year. Ed Mendlowitz

2018 Year End Financial Benchmark Charts and Graphs

January 8, 2019

These charts continue an annual tradition I started ages ago to use when I assist clients with their financial plans. The charts show the 10-year annual and cumulative percentage gains or losses of the major stock market indexes, interest rates, currencies and gold. The indexes include the dividends paid, the price to earnings ratio and this year I added the earnings percent and dividend payout ratio. Some of the amounts have been rounded or the calculations are rounded to facilitate review. These charts are provided for illustrative and educational purposes. No recommendations are made or should be inferred from the information presented. Also note that past results are no indicator of future performance. I will discuss these results in succeeding blogs.

10 year financial benchmark performance of major stock market indexes,
interest rates, currencies and gold

ed blog 1

ed blog 2

ed blog 3