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Economic fundamentals seem strong, in the assessment of investment pros Chris Cook, Eric Lohmeier and Todd Kellenberger, Photo: Ben Swanson

Investment Strategists Show Confidence in Economy


If you harbor doubts about the strength of the economy, talk to Chris Cook from Gilbert & Cook Inc. Or Eric Lohmeier, president of NCP Inc. Or how about Todd Kellenberger, portfolio specialist at Principal Real Estate Investors? They believe that the stock market’s in good shape, valuations for private business are the strongest in years, and real estate remains a solid investment choice.

This assessment comes to us by way of the midyear report on the economy presented by Urbandale-based wealth managers Gilbert & Cook Inc. Chris Cook is chief investment strategist there, and he pointed out that while some think the stock market is overheated, statistics don’t necessarily back that up. Look at price-to-earnings ratios, a widely used tool use to see whether a stock is over or under valued. Applied to the market as a whole, the 25-year average on PE ratios is 16.1. That’s just where it stands today.

A recession (remember 2008?) typically endures for 15 months, while a recovery lasts for 47 months. We currently are in the 110th month of recovery. While the growth rate is hardly setting a blistering pace, Cook says that capital is getting deployed "very prudently."

"This growth rate, although not very exciting, can continue for a long time," he says.

If you’re on the prowl for a business to own, or especially to sell, now’s the time to get moving, said Lohmeier. Interest rates are low, inflation is in check and the federal corporate tax rate just got slashed. All of this has played into the hands of business owners, who are finding that when they sell a business they might command a price of eight times free cash flow. That compares with past averages of five to seven times free cash flow.

"This is the best environment for mergers and acquisitions in my lifetime," says Lohmeier.

Strong times also are playing out for real estate, which Kellenberger reviewed using REITs – real estate investment trusts – as a yardstick. REITs, both U.S. and global, have been top performers in the stock market since 2017. For investors they have provided diversification, and a stable cash flow that produces a decent yield. Nearly $200 billion is sitting on the sidelines awaiting investment in everything from apartments to office buildings to industrial properties, says Kellenberger.

So it’s clear sailing ahead. Unless something roils the waters. Like a trade war? Recent tariffs imposed by the U.S., or countered by foreign nations, already have had a negative impact on steel users and farmers. "With tariffs and trade wars, everybody loses," Lohmeier says.
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Legacy Bridge

More Reader Thoughts on Dining Well in Des Moines 

Can we get a side dish of ambiance with the linguini? Last issue, we highlighted some favored tables at Des Moines restaurants. Now, a reader (who apparently spends a good deal of time dining out) weighs in with thoughts on what could make these meal spots more desirable, more cozy, more inviting with this list of nonnegotiable demands. Here's what she says:
  • The best tables are quiet, with serene lighting. Seriously, designers and owners, sit at each of your tables and check it out.
  • Restaurants with insane noise levels need to please do something to tone it down.
  • I'd like to see Des Moines restaurants try the use of screens, large trees (even artificial) and big booths,  with a big bump up on the candlelight. And certainly do away with TVs and bright overhead lighting, except perhaps in the bar area.
  • One word: Tablecloths. Reduce noise, impart grace. Where are the charming red checked tablecloths of the Old Johnnie's Vets Club?
  • Where are the fireplace dining options that one needs to survive an Iowa winter? Heck, you'd think with winters like ours, every single new restaurant would be built with a fireplace somewhere.

Our readers have spoken. Restaurateurs, take heed.
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Denton Homes
801 Chophouse

Wealthy Americans Motivated by 'Emotional Well-Being' 


While wealth is conventionally defined in financial terms, most high-net-worth Americans today associate money with "emotional well-being," according to a recent report by Boston Private Wealth. Among the 300 Americans surveyed with investable assets between $1 million and $20 million, 65 percent rank "peace of mind" and 54 percent rank "happiness" as the top measurement of their wealth, according to the wealth management firm, which is part of Boston Private Financial Holdings. Financial capital (savings, investment, etc.) ranks third. Click here for details of the study, reported by Barrons.
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The 8 Most Essential People to Help Sell Your Business

While setting the course for the future of your business can be deeply personal, a trusted crew of advisors can help you make them more confidently. Find out who they are >

Charitable Advantages of Owning an IRA
SPONSORED BY FOSTER GROUP, Walt Mozdzer, CFP®, CAP®, Lead Advisor

With higher standard deductions now the norm, it’s more difficult to create meaningful charitable deductions year-to-year. If you’re over 70-1/2, learn how to use your IRA to make gifts and still reap the tax benefits, standard deduction or not. > FULL ARTICLE

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