The

Bulls

and

Bea

rs R

epor

tOctober

2016Fourth

Quarter

Michael LansdenFirst Vice President/Investments

Branch Manager

1170 Wall StreetJacksonville, Illinois 62650

(217) 243-8060 | (866) 779-2723(217) 243-8160 Fax

Also available for appointments at: 3131 Robbins Road

Springfield, Illinois 62704 (217) 726-0875

michael.lansden@stifel.com

Inside This Issue

1. Tuesday, November 8

2. Market Update

3. DOL Update

4. Family Update

5. Let’s Go Blues!

6. Market Tidbits

1O F F I C E O F M I C H A E L L A N S D E NTuesday, November 8Tuesday, November the 8th, marks the date for the United States Presidential Election, and we will elect our 45th President to the White House. I don’t know about you, but I can’t wait until November 9 and for the election to finally be over! You can’t turn on the TV, listen to the radio, or do a search without hearing the minute-by-minute news updates about this election. It is mentally draining! Regardless of the outcome, I am a believer that the economy and corporations will continue to move forward just fine and that policy coming from the White House will not have too much of an impact on most companies’ day-to-day operations. We have an election every four years – this isn’t anything new. This event is not likely to be a major influence on the economic outlook. Plus, we have so many checks and balances in place, it will be tremendously difficult for either candidate to accomplish a fraction of their promises. My recommendation – turn off the news and stop wasting time on the “what ifs” and start focusing on the important things in life. Don’t let a short-term issue influence your long-term goals.

Market UpdateTo my surprise, the markets are having a very good year. Through the end of September, the S&P 500 and Dow Jones Industrial Average are up over 7% and the U.S. aggregate bond index is up over 5%. Most of our clients are having a very good year this year. The one area that continues to struggle is the international markets. To date, the MSCI EAFE index (Morgan Stanley Europe, Australia, and Far East) is at less than 2%. This is not a big surprise, though, given the international problems. One interesting area worth noting is the emerging markets, which have surprised many and are now leading the returns for 2016, up over 16% based on the MSCI EM index. Emerging markets have been out of favor for a long time. It will be interesting to see if they have finally turned the corner and will start a new growth phase. The other item worth mentioning is the difference between large cap value stocks versus large cap growth stocks. Thus far in 2016, value stocks are doing much better than growth stocks. Think of large dividend payers and older stable companies. Investors have been flocking to solid, predictable,

Performance Numbers(Year-to-Date as of 9/30/16)

Dow Jones Industrial Average 7.21%Standard & Poor’s 500 7.84%NASDAQ Composite

7.09%Russell 2000 11.46%

Morgan Stanley International Index (EAFE) 1.73%

Barclays Capital U.S. Aggregate Index 5.80%

S&P National AMT-Free Municipal Bond Index 3.93%

DOW UBS Commodity Index 8.87%

Stifel, Nicolaus & Company, Incorporated | Member SIPC & NYSE | www.stifel.com

dividend-paying stocks and avoiding higher-risk growth stocks. In my humble opinion, high-dividend stocks are starting to look expensive. Bonds also look expensive to me as interest rates continue to go down to near record lows. I am finding it very hard to find any type of respectable interest rates without having to go too far out in maturity.

DOL UpdateAs you may have heard, the Department of Labor (DOL) recently issued a rule that will impose a fiduciary standard on financial advisors who provide investment advice related to Individual Retirement Accounts (IRAs) and certain other types of retirement accounts.

While the rule will subject me and my firm to a number of new policies and procedures, my commitment to providing you with personal service and honest, unbiased advice remains unchanged. Doing what’s best for you is not only my personal philosophy, it’s part of Stifel’s more than 125-year-old tradition of “safeguarding the money of others as if it were your own.”

As my firm continues to work through the complexities of the 1,000-plus-page rule, which takes effect in April 2017, I will be reviewing my accounts to determine which, if any, of my clients may be affected by the new regulations and will contact you should any changes need to be made to your account.

In the meantime, if you’d like to discuss the rule or any other investment-related matter, please feel free to call me.

I appreciate your continued trust and look forward to helping you pursue your financial goals.

Family UpdateLife is sure changing rapidly for the Lansden family! The term “sandwich” generation sure comes to mind. Kary and I have been extremely busy getting Clare off to college and trying to attend the DePauw football games where she cheers, Grace is getting ready for her drivers license and is an SHG cheerleader, and Kaitlyn enjoys gymnastics and karate. In September, my father had a scare that required an emergency surgery and a 2.5-week stay in the hospital. My father was the primary care provider for my Mom, who is still at home as well. We have been busy taking care of my father and also providing 24-hour care for my Mother. Dad is now home and doing better, but will have a long recovery. Anyone who has lived through these times knows it can be very stressful and requires a lot of time. I have been out of the office a fair amount, but hoping we now have my parent’s situation under control and hoping life will be a bit more back to normal, if there is such a thing! Thank you for your patience.

Going through this event with my parents reinforces the need to plan and take the time to be sure you have all of your important documents in place. When was the last time you reviewed your will? Is your power of attorney up to date? Are you aware there is a big difference between a health care power of attorney and a financial power of attorney? Would your family know what to do if something happened to you, and do they know where all of your important papers are located? I know this is a topic that most of you wish not to discuss, but believe me, your family will be thankful for any advanced planning on your part. If not today, when? In the July statements, Stifel included a very nice piece in the

“Investment Strategist” report covering all the power of attorney topics. If you would like an additional copy, let us know. Very good piece!

Market TidbitsThe U.S. stock market was worth $23.7 trillion as of 6/30/16. The S&P 500 made up 81% of the total U.S. stock market capitalization as of 12/31/96, equal to $19.2 trillion. (Source: BTN Research)

The U.S. bond market (including treasury, municipal, corporate, mortgage and asset-backed debt) was worth $40.7 trillion as of 6/30/16. The U.S. bond market was worth $12.4 trillion as of 12/31/96. (Source: Securities Industry and Financial Markets Association)

The top marginal corporate tax rate in the United States is the third highest in the world out of 188 countries. Only the United Arab Emirates (UAE) and Puerto Rico have a top marginal corporate tax rate that is higher than the USA’s. (Source: Tax Foundation)

It took at least $465,626 of adjusted gross income during tax year 2014 (i.e., the most recent year that tax data has been collected) to rank in the top 1% of wage earners. (Source: Internal Revenue Service)

Projected payroll taxes during fiscal year 2016 (i.e., the 12 months ending 9/30/16) are $1.1 trillion, 33% of the total tax receipts ($3.3 trillion) forecasted for the full fiscal year. (Source: Office of Management and Budget)

Our national debt, $19.5 trillion today, is projected to reach $28.2 trillion as of the

end of fiscal year 2026, i.e., 10 years from now. (Source: Congressional Budget Office)

Interest payments on our national debt are projected to nearly triple of the next 10 years, rising from $248 billion in fiscal year 2016 to $712 billion in fiscal year 2026. (Source: Congressional Budget Office)

House of Representative member Ried Ribble (Wisconsin) has introduced legislation (“Save Our Social Security Act”) that over several years would increase the “full retirement age” for Social Security from 67 to 69. The last time the nation’s Social Security program underwent major reform was 1983. The changes implemented at the time included a rise in the retirement age in stages from 65 to 67. The chairman of the National Commission on Social Security Reform in 1983 was Alan Greenspan. (Source: Congress)

The trust fund backing Social Security retirement benefits took in payroll tax contributions that exceeded retirement benefit payments made to retirees for the 26 consecutive years of 1984-2009. Since, 2010, benefits paid have exceeded payroll taxes collected. In 2015, covered workers paid in $679.5 billion of payroll taxes, but retirees received $742.9 billion of benefit payments. (Source: SS Trustees 2016 Report)

The recently completed month of July 2016 had a lowest closing yield on the 10-year Treasury note (1.36%) and the 30-year Treasury bond (2.10%) in history, both occurring on Friday, 7/8/16. (Source: Treasury Department)

National health care expenditures in the United States during calendar year 2016 are projected to reach $3.351 Trillion, or $10,346 per person. (Source: Centers for Medicare and Medicaid Services)

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The Bulls and Bears Report | October 2016 | Fourth Quarter The Bulls and Bears Report | October 2016 | Fourth Quarter

Right: Grace is now a SHG cheerleader.

Below: Clare enjoying her first year cheerleading at DePauw.

Above: The Lansden girls during our summer business trip/vacation to Michigan.

Left: Elvis Himselvis highlighted the 8th annual Jacksonville client appreciation event.

Above: Poor Bear had to wear the “cone of shame” due to a tail injury.

Let’s Go Blues!!Yes, I am still a raging hockey fan, and the St. Louis Blues are still my favorite team. Each fall, I have given away two tickets for an upcoming Blues game to those of you who are paying attention (or have any interest). E-mail me if you would like to have your name submitted for this fall’s drawing for two tickets to an upcoming game. And, yes, I am still trying to play each Sunday night in the “senior league.” Come in the office any Monday, and you will see me limping around, telling myself I am too old for this stuff!

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1170 Wall StreetJacksonville, Illinois 62650

The Bulls and Bears Report | October 2016 | Fourth Quarter

The Dow Jones Industrial Average (DJIA) is an index that shows how 30 large, publicly owned companies based in the United States have traded during a standard trading session in the stock market. The Standard & Poor’s 500 Index (S&P 500) is a capitalization-weighted index that is generally considered representative of the U.S. large capitalization market. The NASDAQ Composite Index is a capitalization-weighted index that is comprised of all stocks listed on the National Association of Securities Dealers Automated Quotation System stock market, which includes both domestic and foreign companies. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the broader Russell 3000 Index. The average market capitalization is approximately $490 million, and the median market capitalization is approximately $395 million. The Morgan Stanley Capital International Europe, Australasia, and the Far East Index (MSCI EAFE) is a market capitalization-weighted index that represents developed markets outside North America. The MSCI EM (Emerging Markets) Europe, Middle East and Africa Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the emerging market countries of Europe, the Middle East & Africa. The Barclays Capital U.S. Aggregate Index (AGG) is comprised of the Barclays Capital U.S. Government/Credit Index and the Barclay Capital Mortgage-Backed Securities Index. All issues in the index are rated investment grade or higher, have a least one year to maturity, and have an outstanding par value of at least $100 million. The S&P National AMT-Free Municipal Bond Index is a broad, comprehensive, market value-weighted index designed to measure the performance of the investment-grade tax-exempt U.S. municipal bond market. The Dow Jones-UBS Commodity Index is a broadly diversified index that tracks commodity futures and is composed of commodities traded on U.S. exchanges, with the exception of aluminum, nickel, and zinc, which trade on the London Metal Exchange. The index is calculated on both an excess return and total return basis. Index returns include the reinvestment of dividends but do not include adjustments for brokerage, custodian, and advisory fees. Indices are unmanaged and are not available for direct investment. Past performance is no guarantee of future results.

When investing in dividend-paying stocks, changes in market conditions or a company’s financial condition may impact the company’s ability to continue to pay dividends, and companies may also choose to discontinue dividend payments. There are special considerations associated with international investing, including the risk of currency fluctuations and political and economic events. Investing in emerging markets may involve greater risk and volatility than investing in more developed countries. When investing in bonds, it is important to note that as interest rates rise, bond prices will fall. High yield bonds have greater credit risk than higher quality bonds. The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in commodity trading can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

Stifel does not provide legal or tax advice. You should consult with your legal and tax advisors regarding your particular situation.