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• MARCH 8, 2019 • Midlands Business Journal
INVESTMENTS
INVESTMENTS
A section prepared by the staff of the Midlands Business Journal
March 8, 2019
Local experts: Panic has no place in the investment portfolio by Michelle Leach
Put bear markets into healthy perspective, even seize opportunities through doom and gloom. “The market is basically the same as always; it’s messy and volatile, and some narratives have truth and some don’t,” said CLS Investments President/Chief Inv e s t m e n t O ff i c e r R u s t y Va n n e m a n . “Our outlook for 2019 is still intact.” Historically, the third year of a presidential cycle tends to be strong. Likewise, Vannemen referred to recent “bests.” Vanneman Feb. 22 reportedly capped the best start to a year for the Dow Jones Industrial Average and S&P 500 since 1987. Additionally, gains have reigned for eight consecutive weeks — the first time since 1964. Corporate earnings growth actually represents a potential headwind, as Vanneman said it’s been more than double the long-term average of 8 to 10 percent. He indicated a fall to reality. Bullish market enthusiasm and positivity may (counterintuitively) require a step back. Historical precedent also has its lim-
John L. Decker, senior VP, managing director of investment banking and co-director of Nebraska branches at D.A. Davidson. itations. aforementioned observations about polit“December was incredibly atypical ical and market volatility, Vanneman cau— the worst December since the 1930s,” tions: “Political bias messes up people’s Vanneman said. investing. It doesn’t help; it hurts.” The Dow and S&P 500 reportedly Creative Planning Managing Director posted losses last rivaled in 1931 during Ryan Swartz emphasized corrections and the Great Depression. bear markets (losses of -10 and -20 perAcknowledging it may run counter to cent respectively) are a “natural part of a
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healthy economic cycle,” and panic selling during downturns is a common mistake that prevents investors from capturing market returns. The recent bear market that bottomed out on Christmas Eve was the 15th such decline since World War II, Swartz said, and the 15th that gave way to a bull market. “During this time, according to M o r n i n g s t a r, $ 3 5 billion flowed out of asset allocation funds in the fourth quarter, the worst since 1993,” he said. Bear markets occur every five years Swartz or so (and are typically short-lived); corrections occur every year on average, he said. “Historically, they are not good predictors of a recession,” Swartz said. “Since 1930 there have been nine bear markets that have not led to a recession.” So, a bear market doesn’t necessarily impact a small- to mid-sized business’s access to capital markets alone. Recent tax reform, the moderating of interest rates, historically low unemployment and continued corporate profit gains have resulted in SMBs’ willingness to expand capital expenditures. Swartz said this could change, but: “A bear market may not necessarily be the catalyst for that change.” D.A. Davidson SVP/Managing Director of Investment Banking/Co-Director of Nebraska Branches John Decker said the company sees concerns of economic slowdown but the U.S. economy’s underlying fundamentals remain “largely positive.” For instance, January payroll increased by 304,000 jobs — what First Trust characterized as the highest share of working adults since 2008. “U.S. job growth looks to continue, spurred at least in part by the impact companies are experiencing as a result of a lower tax burden,” he said. That said, bear markets are an “unavoidable part of every investor’s longterm investment horizon.” Citing First Trust, Decker said the average bull market between 1926 to 2018 lasted 9.1 years (with an average cumulative total return of 473 percent,) versus the average bear market of 1.4 years (with an Continued on page 7.
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Investments — inside MARCH 8, 2019
THE BUSINESS NEWSPAPER OF GREATER OMAHA, LINCOLN AND COUNCIL BLUFFS
THIS WEEK 'S ISSUE:
$2.00
VOL. 45 NO. 10
Lamp Rynearson poised for growth in 60th year under new brand by Michelle Leach
Trouvaille Omaha aims to offer empowering, collaborative option for working women. – Page 2
40 er d Un 40 Kaiser navigates evolving field of college advising at UNO. – Page 3
ess sin es u a B ag ah nal P m O Jour
The Omaha Bakery identifies market for keto offerings, expands services. – Page 29
In its 60th year, Lamp Rynearson is anticipating 10-plus percent growth in the size of its 176-employee team and growth across all of its market areas under a new, unified and simplified brand. “We had been doing business with more than one name since our merger with Larkin Group and Larkin Aquatics from the Kansas City area several years ago,” said CEO and President Nancy L. Pridal. “Our branding became a little more confusing with the addition of TZA Water Engineers from Lakewood, Colorado, to our team. Our 60th anniversary year provided the perfect opportunity to work toward brand clarity and to have some fun.” Brand planning efforts for the civil engineering, survey and landscape architecture firm headquartered at 14710 West Dodge Road in Omaha began in early 2018. “Employees were provided opportunities to provide input on the new brand through an online survey, employee forums and a Continued on page 9.
CEO and President Nancy L. Pridal … Milestone year presents opportunity for civil engineering, survey, landscape architecture firm to unify its offices under one name and brand. (Photo by MBJ / Becky McCarville)
North End Teleservices on cusp of accelerated growth in 2019 by Becky McCarville
North End Teleservice’s President and CEO Carmen Tapio expects the four-year-old company to double its capacity in 2019 and has plans to open a second south Omaha location the following year. “We have been working in some niche spaces and they have started to come to fruition for us, and we are expecting to see substantial growth,” she said.
Accompanying the upward trajectory, Tapio bought out the company’s investor in Oct. 2018. Now the company is certified woman- and minority-owned and is HUBZone certified, a Small Business Administration program for small companies that operate and employ people in Historically Under-utilized Business Zones. A five-year contract with Continued on page 9. CEO and co-founder Taylor Monks … Poised to change how trucking industry manages documentation, pays for associated software tools.
BasicBlock gets early traction from transportation partners across US by Michelle Leach
President and CEO Carmen Tapio … Doubling the capacity of its northeast facility with sights set on south Omaha.
Leveraging the power of blockchain, BasicBlock aims to flip the trucking industry on its head while contributing to putting Nebraska on the map as an innovation center and destination for next-generation talent and businesses, according to CEO and co-founder Taylor Monks. “We’re doing that against all odds, with no investors,” Monks
said. “We haven’t taken any venture capital. We are just looking for the right strategic partner.” What the 24-year-old Monks and fellow founder Nobl’s Brett Byman have is tens of thousands of dollars in pre-sales and buy-in from companies in Nebraska and across the U.S. Partners span W.N. Morehouse Truck Line, a fourth-generation, family-owned transportation Continued on page 27.