Weekly Market Commentary September 6, 2016

“We can never know about the days to come, but we think about them anyway…”

--Carly Simon

Economists and market analysts have been thinking a lot about the Federal Reserve and the actions it may take before the end of 2016. Friday’s employment numbers helped fan the speculative fire. The U.S. Labor Department reported the unemployment rate remained at 4.9 percent with 151,000 jobs added during August.

The broad market consensus was 180,000 jobs would be created, according to MarketWatch. The publication cited a source as saying the report, “…wasn’t strong enough to force the Fed to raise rates in September, but it also wasn’t weak enough to raise concern about the U.S. economy or dampen the outlook for corporate earnings. As such it’s a mildly dovish report…”

Economists and political leaders also are thinking a lot about the impending British exit from the European Union (EU). At the G20 Summit – a forum for government and central bank leaders from 20 countries – British Prime Minister Theresa May confirmed, “Brexit means Brexit.” However, the BBC reported there remains a general lack of agreement within the British government about exactly what the country’s relationship with the EU should be after Brexit.

The potential effects of Brexit gained some clarity at the G20. The Guardian reported, “…the U.S. wanted to focus on trade negotiations with the EU and a bloc of pacific nations before considering a deal with the U.K.” In addition, it reported Japan threatened, “…a string of corporate exits from the U.K. unless some of the privileges that come with access to the single market are maintained.”

U.S. stock markets remained sanguine. The Dow Jones Industrial and Standard & Poor’s 500 Indices finished the month almost flat. Most stock markets across Europe finished the month higher.


Data as of 9/2/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 0.5% 6.7% 11.9% 10.0% 13.2% 5.2%
Dow Jones Global ex-U.S. 1.0 3.9 6.4 0.2 1.8 -0.2
10-year Treasury Note (Yield Only) 1.6 NA 2.2 2.9 2.0 4.8
Gold (per ounce) 0.5 24.7 16.4 -1.6 -6.7 7.8
Bloomberg Commodity Index -2.4 5.6 -6.7 -14.3 -12.6 -7.0
DJ Equity All REIT Total Return Index 1.6 15.0 27.7 16.4 14.7 6.8

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

We’re devils and black sheep, and really bad eggs… The movie, Pirates of the Caribbean, made light of piracy but maritime crime has a significant economic impact.

About 50 percent of the goods that trade globally travel by sea, according to the United Nations Conference on Trade and Development (UNCTAD)’s 2014 report, Maritime Piracy. It estimated the economic costs of piracy – including ransoms, insurance, re-routing ships, security equipment and guards, naval forces and military operations, counter-piracy organizations, and other factors – at $7-12 billion in 2010.

During the first half of 2016, however, the cost hit a two-decade low. The Economist reported:

“The recent decline in global piracy can be attributed in part to better security on ships. For years, the UN’s International Maritime Organization discouraged boat owners from arming their crews. Ships tried in vain to defend against heavily-armed pirates using little more than diligent watch-keeping and water cannons. In the mid-2000s, facing rising insurance and ransom costs, shipping companies began employing private security contractors. These firms are increasingly supplied by “floating armories” to help evade laws that bar crews from bringing weapons into territorial waters…Better policing of the high seas has also played a part.”

In 2010, governments and marine insurers identified high-risk shipping areas. Not long after, floating armories were established and became a type of temporary agency for armed guards on the high seas. The Economist reported, “At the peak of Somali piracy in 2012, ship owners would pay about $45,000 per trip for armed guards.” When they weren’t on a client’s ship, guards returned to the floating armory until employed by another merchant ship.

Floating armories are experiencing some growing pains, as have many fledgling industries before them. Piracy is down, and so is demand for their services.

Think About It

The Federal Election Commission (FEC) recently sent letters to individuals who have filed to be Presidential contenders, who may not really be qualified to run. The list of suspect candidates includes Darth Vader, Jean-Luc Picard, God, Captain Crunch, and Queen Elsa. A letter sent to H. Majesty Satan Lord of Underworld Prince of Darkness said:

“It has come to the attention of the Federal Election Commission that you may have failed to include an accurate candidate name and an accurate principal campaign committee under 52 U.S.C. § 30102(e) when you filed FEC Form 2…Furthermore, the Commission requires the filing to be true, correct, and complete…Additionally, knowingly and willfully making any materially false, fictitious, or fraudulent statement or representation to a federal government agency, including the Federal Election Commission, is punishable under the provisions of 18 U.S.C. § 1001.”

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

Sources:

http://www.azlyrics.com/lyrics/carlysimon/anticipation.html

https://www.dol.gov/newsroom/releases/opa/opa20160902

http://www.marketwatch.com/story/wall-street-poised-for-small-gains-with-key-jobs-report-ahead-2016-09-02

http://www.bbc.com/news/uk-politics-37269916

https://www.theguardian.com/world/2016/sep/04/g20-theresa-may-warns-of-tough-times-for-uk-economy-after-brexit

http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html

http://pirates.wikia.com/wiki/Quote:Jack_Sparrow

http://www.safety4sea.com/images/media/pdf/UNCTAD-Maritime-Piracy-Part1.pdf

http://www.economist.com/blogs/graphicdetail/2016/09/daily-chart-1

http://www.economist.com/news/middle-east-and-africa/21688900-brisk-business-safeguarding-guns-cruisin-guns

https://www.marketplace.org/2016/09/01/elections/final-note/satan-wont-run-president-fecs-watch

http://docquery.fec.gov/pdf/439/201608310300097439/201608310300097439.pdf

Weekly Market Commentary August 29, 2016

Attention investors: U.S. interest rates may be moving up and it might happen this year.

During last Friday’s speech at the Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, Fed Chairwoman Janet Yellen signaled that a rate hike is probably coming but, as usual, she didn’t offer any specifics about the timing:

“…Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months. Of course, our decisions always depend on the degree to which incoming data continues to confirm the Committee's outlook.”

There’s a good chance the increase could occur during 2016. Goldman Sachs economists, cited by Bloomberg, said the subjective odds of a September rate hike increased from 30 percent to 40 percent last week. Bloomberg’s data suggests a 65 percent chance of a rate hike by December.

The U.S. bond market responded with a flattening of the yield curve. When the bond yield curve is flat, short-term and long-term bonds of similar credit quality offer investors almost the same rates. Barron’s explained: “A flattening yield curve can indicate economic weakness. It signals investors expect inflation (and interest rates) to stay low for a long time.”

Why would the yield curve flatten as the Fed raises rates? One expert told Barron’s he expects a Fed rate hike to lower inflation expectations, causing interest rates on longer-term benchmark Treasuries to move lower.

Stock investors weren’t thrilled about Yellen’s comments last week, and major U.S. indices largely finished the week lower.


Data as of 8/26/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) -0.7% 6.1% 11.8% 9.4% 13.0% 5.2%
Dow Jones Global ex-U.S. -0.9 2.9 4.4 -0.4 2.2 -0.1
10-year Treasury Note (Yield Only) 1.6 NA 2.2 2.8 2.2 4.8
Gold (per ounce) -2.1 24.2 17.7 -2.4 -5.9 8.0
Bloomberg Commodity Index -1.5 8.2 -0.2 -13.5 -12.0 -6.7
DJ Equity All REIT Total Return Index -0.4 13.1 24.3 14.9 14.5 6.7

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Why aren’t American businesses investing? For quite some time, American consumers have made the largest contribution to U.S. gross domestic product (GDP) growth. During the second quarter of 2016, personal spending and exports made positive contributions to GDP. These were largely offset by negative contributions from “private inventory investment, residential fixed investment, state and local government spending and nonresidential fixed investment.”

Last week, The Economist pondered why businesses are not investing:

“Firms are on a six-year hiring spree that shows little sign of abating; payrolls swelled by an average of 190,000 a month between May and July. Competition for workers is pushing up wages. The median pay rise in the year to July was 3.4%, according to the Federal Reserve Bank of Atlanta. Americans are spending that cash; in the second quarter, consumption per person grew at an annual pace of 5.5%, equaling its fastest growth in a decade. Yet real GDP is expanding by only 1.2% a year. The culprit seems to be business investment, which has fallen for three consecutive quarters.”

The Economist reflected on the effects of low oil prices, questioning whether weak demand for goods or tighter credit was the culprit behind low business spending. It concluded that slow trend growth (the rate at which the U.S. economy is expected to grow over a period of time) is producing fewer opportunities for profitable long-term investment, and offered the opinion that a solution could be found in fiscal policy:

“Businesses anticipating slower long-term growth cannot be expected to invest much. And politicians cannot easily conjure up technological progress. But they can boost competition, simplify taxes and regulation, and invest in infrastructure and education, all of which would help to raise American productivity.”

Of course, getting politicians to agree on a course of action and implement a coherent fiscal policy is a tall order.

Think About It

When we decided not to sell our business people called us a lot of things besides crazy – things like arrogant and entitled. The same words that I've heard used to describe our generation time and time again. The Millennial Generation. The 'Me' Generation. Well, it's true. We do have a sense of entitlement, a sense of ownership, because, after all, this is the world we were born into, and we are responsible for it.

--Evan Spiegel, CEO of Snapchat

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

Sources:

[1] https://www.federalreserve.gov/newsevents/speech/yellen20160826a.htm

[2] http://www.bloomberg.com/news/articles/2016-08-27/september-in-play-for-bond-traders-as-goldman-sees-40-fed-odds

[3] http://www.investopedia.com/terms/f/flatyieldcurve.asp

[4] http://www.barrons.com/articles/watch-out-the-yield-curve-is-flattening-1472273131?tesla=y

[5] http://www.reuters.com/article/us-global-markets-idUSKCN11101N

[6] http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

[7] http://www.economist.com/news/finance-and-economics/21705847-americans-are-spending-and-hiring-so-why-arent-firms-investing-econundrum

[8] https://mic.com/articles/118488/in-one-quote-the-snapchat-ceo-s-graduation-speech-shuts-down-millennial-haters#.gKtkTKUu9

Weekly Market Commentary August 22, 2016

Last week, Wall Street was speculating about monetary policy with the enthusiasm of commentators trying to predict who will bring home Olympic gold.

The Federal Open Market Committee (FOMC) is expected to introduce another rate hike before the end of 2016, according to the BBC, and it has just three opportunities to deliver the goods – during its September, November, or December meetings.

Analysts and pundits parsed minutes from July’s FOMC meeting looking for clues about timing and found relatively few because there was no consensus view at the July meeting. The BBC wrote, “According to the minutes, some FOMC members felt ‘economic conditions would soon warrant taking another step,’ while others believed more data was needed.” The BBC also pointed out a hike in November was unlikely because of the timing relative to the U.S. Presidential election.

The sooner-is-better camp inside the Fed has been quite vocal recently. CNBC reported New York Fed President William Dudley, Atlanta Fed President Dennis Lockhart, and San Francisco Fed President John Williams each made statements confirming solid economic growth is expected during the second half of 2016, and indicating it’s time to continue increasing interest rates in the United States.

Recently, the CME Fed Watch tool (which looks at 30-Day Fed Fund futures prices to gauge the likelihood of changes in Fed policy) put the probability of one-quarter to one-half percentage point rate increase during September at 88 percent.

That may change this week after Fed Chair Janet Yellen speaks at the Fed’s summer retreat in Jackson Hole, Wyoming. She’s expected to provide some indication of whether the Fed is ready to take action.

If you would like more information, just ‘friend’ the Fed. It now has a Facebook page.


Data as of 8/19/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 0.0% 6.9% 5.0% 9.9% 14.2% 5.3%
Dow Jones Global ex-U.S. -0.4 3.8 -1.5 -0.3 2.5 0.0
10-year Treasury Note (Yield Only) 1.6 NA 2.1 2.9 2.1 4.8
Gold (per ounce) -0.4 26.8 19.6 -0.5 -6.1 8.0
Bloomberg Commodity Index 2.6 9.8 -2.6 -12.8 -11.5 -6.7
DJ Equity All REIT Total Return Index -1.9 13.6 15.8 16.3 15.4 6.9

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Public Wi-Fi is remarkably convenient, making it possible to connect your tablet, laptop, phone, or other device in the middle of a national park, at a local bookstore or café, or while waiting for a flight. Whenever you’re connecting in a public venue, remember public Wi-Fi is not secure – even if you’re paying to access it. Norton warned:

“…Wi-Fi uses radio waves. The openness of these signals at public hotspots, combined with the right eavesdropping software, can allow others to take information without your knowledge – much like someone overhearing a private conversation in a crowded restaurant. Don’t assume that a public Wi-Fi network is safe and secure simply because it has a password. Remember, these passwords are shared, so anyone nearby can easily hop onto the network and see what you’re doing.”

Protect yourself with some dos and don’ts of free public Wi-Fi:

Do:

  • Turn ‘sharing’ off. Your computer may be set to ‘share’ files and printers or allow remote login from other computers. Make sure ‘sharing’ is turned off when you are on public Wi-Fi.

  • Access only public sites. Check the weather or stock markets. Read the news or your favorite blogs. Avoid sites that require you to login.

  • Use a virtual private network or VPN. VPN software may allow you to route all of your activity through a separate and secure private network even when using public Wi-Fi.

Don’t:

  • Assume a Wi-Fi option is legitimate. Cyber criminals have been known to set-up connections with names that are similar to the name of wireless offered by the café, hotel, etc. Talk with an employee before accessing Wi-Fi to get the correct name and IP address.

  • Access password-protected websites. When you’re on public Wi-Fi, do not log in to password protected email accounts or social media sites; do not enter credit card information; and do not engage in online banking.

Public Wi-Fi is wonderful – as long as you understand the risks and protect your personal information.

Think About It

“I just work hard and try my best every time I step up on those blocks. I'm very goal-oriented. I've always set high goals for myself. When I was little I never dreamed of going to the Olympics, but once I did I wanted to do my very best at that level. Four years ago, when I was visualizing my final, I never envisaged anything other than winning gold. Once I get to that level, I'm able to set the goals for myself and go out and achieve them.”

--Katie Ledecky, Olympic gold medalist

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Stock investing involves risk including loss of principal.

* Consult your financial professional before making any investment decision.

Sources:

http://www.bbc.com/news/business-37111395

http://www.profitf.com/calendars/fomc-meeting-schedule/

http://www.cnbc.com/2016/08/18/feds-williams-waiting-too-long-to-hike-rates-could-be-costly.html

http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html

https://www.bloomberg.com/news/articles/2016-08-20/goldman-says-don-t-bet-on-dollar-selloff-as-dovish-fed-priced-in

http://qz.com/761534/finally-you-can-be-friends-with-the-federal-reserve-on-facebook/

http://us.norton.com/dangers-of-public-wifi/promo

http://lifehacker.com/5576927/how-to-stay-safe-on-public-wi-fi-networks

https://usa.kaspersky.com/internet-security-center/internet-safety/public-wifi#.V6uOzBTp5g0

http://www.aarp.org/money/scams-fraud/info-2016/dangers-of-free-public-wifi-ea.html?intcmp=AE-HP-WFY1

https://action.aarp.org/site/SPageNavigator/FWN_Cyber_Scams.html?cmp=RDRCT-WTCHURWIFI_JUL08_015

http://www.health.com/fitness/katie-ledecky-quotes

Weekly Market Commentary August 15, 2016

How do you measure stock market valuation?

If you look at conventional measures – like price-to-earnings (P/E) ratios – then U.S. stock markets appear to be pricey. The Wall Street Journal reported trailing 12-month P/E ratios are high when compared to 10-year averages.

High P/E ratios haven’t dampened investors’ interest in U.S. stocks, and share prices have been moving higher. The Dow Jones Industrial Average (Dow), Standard & Poor’s 500 Index, and NASDAQ all reached new highs last Thursday – the first time that has happened since 1999.

Barron’s suggested investors’ enthusiasm for stocks is rooted in the search for yield. “With the Treasury’s 10-year note yielding 1.5 percent – near lows not seen before in modern history – there’s no alternative to stocks for investors who want returns.”

The relationship between stock yields and bond yields may have some investors measuring market valuations in different ways. Investopedia reported, during the late 1990s, Wall Street professionals came up with a new method for gauging stock market valuation. It was called The Fed Model and it determined full valuation by comparing stock yields to bond yields. (Please note: ‘The Fed Model’ wasn’t created by the Federal Reserve System, and the Federal Reserve System does not endorse it.)

The Wall Street Journal offered this analysis:

“…the so-called Fed model, which says that stocks’ earnings yields – that is, expected annual earnings divided by the share price – should equal the yield on the 10-year Treasury note. With the 10-year now yielding 1.52 percent, the Dow would be fairly valued at 66 times earnings rather than the current, measly 18. Dow 68,000 anyone?”

It’s an enthusiastic estimate. While some analysts are speculating the Dow could surpass 20,000 during the next 12 months, according to CNBC, others are suggesting investors proceed with caution.


Data as of 8/12/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 0.1% 6.9% 4.7% 8.9% 13.1% 5.6%
Dow Jones Global ex-U.S. 2.7 4.3 -2.6 -0.3 2.0 0.2
10-year Treasury Note (Yield Only) 1.5 NA 2.1 2.6 2.2 5.0
Gold (per ounce) 0.9 27.3 20.8 0.3 -4.9 8.0
Bloomberg Commodity Index 0.3 7.0 -7.5 -12.9 -11.8 -6.9
DJ Equity All REIT Total Return Index -0.2 15.8 19.2 14.3 15.1 7.3

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

An olympic medal in any other shape still represents a great feat. In 1900, the Olympic games were part of the World’s Fair in Paris. Champions received square medals! Olympics.org reported:

“The 1900 Olympic Games are perhaps the most unusual Olympics in modern history. They have been termed, with the 1904 Olympics, ‘The Farcical Games.’ The 1900 Olympics were poorly organized, almost chaotic. Years later many of the competitors had no idea that they had actually competed in the Olympics, but only that they had competed in an international sporting event in Paris in 1900.”

During the Paris Olympics, champions did not receive gold medals; they were given silver medals. The first time gold medals were awarded was at the 1904 Olympics in St. Louis, Missouri. While gold medals have become the standard, they haven’t been made of solid gold since 1912. Instead, winners’ medals have been made of a combination of gold and silver.

CNN reported gold medals in Brazil are comprised of “494 grams of silver and 6 grams of gold…a gold medal is worth about $587 in current market prices.” The silver medal is worth about $305, and the bronze medal has negligible monetary value, according to CNNMoney. Of course, once a medal has been awarded, its value may increase significantly.

U.S. Olympians receive cash rewards, in addition to medals. CNNMoney reported, “The U.S. Olympic Committee awards $25,000 for gold medals, $15,000 for silver, and $10,000 for bronze.” Olympians owe state and federal taxes on their prize money, as well as the value of their medals.

Think About It

“…most people listen with the intent to reply, not to understand. You listen to yourself as you prepare in your mind what you are going to say, the questions you are going to ask, etc. You filter everything you hear through your life experiences, your frame of reference. You check what you hear against your autobiography and see how it measures up. And consequently, you decide prematurely what the other person means before he/she finishes communicating.”

--Stephen Covey, American author

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Stock investing involves risk including loss of principal.

* Consult your financial professional before making any investment decision.

Sources:

http://www.wsj.com/articles/stocks-hit-new-highs-and-that-could-be-just-the-start-1470954978

http://www.barrons.com/articles/stocks-hit-record-highs-but-end-little-changed-1471060856?mod=BOL_hp_we_columns

http://www.investopedia.com/articles/stocks/08/fed-model.asp

http://blogs.wsj.com/moneybeat/2016/08/10/dow-68000-here-we-come/

http://www.cnbc.com/2016/08/11/wall-street-sees-these-10-stocks-lifting-the-dow-to-20000.html

http://www.marketwatch.com/story/goldman-sachs-says-stay-away-from-stocks-for-the-next-three-months-2016-08-01

https://www.olympic.org/paris-1900

http://library.la84.org/SportsLibrary/Mallon/1900.pdf (Page ix)

http://www.topendsports.com/events/summer/traditions/medals.htm

http://edition.cnn.com/2016/07/31/sport/olympics-making-of-a-medal/

http://money.cnn.com/2016/08/12/news/olympians-gold-medals-taxes-us/

https://www.stephencovey.com/7habits/7habits-habit5.php

Weekly Market Commentary August 8, 2016

It’s déjà vu all over again!

The Chicago Board of Options Exchange (CBOE) Volatility Index, also known as the VIX, tracks the prices of options on the Standard & Poor’s 500 (S&P 500) Index. Since options often are used to hedge portfolio risk, the VIX is considered to be a ‘fear gauge’ that has value with regard to market volatility during the next 30 days. The VIX moves higher when investors are worried and lower when they’re feeling content. While this is not necessarily predictive, it does measure the current degree of fear present in the stock market.

Last Friday, the VIX dropped to 11.18, which was a two-year low. Financial Times attributed investor complacency to “…a buoyant U.S. jobs report and easy monetary policy.” However, it also pointed out analysts’ concern that the current lack of fear reflects a disregard for threats to world economic stability as well as sparse trading during a vacation month.

Last year in early August, we saw a similar phenomenon. The VIX reached very low levels and then it zoomed from 13 to 53 between August 18 and August 24. At 53, the VIX was higher than when Standard & Poor's cut the credit rating of the United States in 2011, or at the apex of the European debt crisis in 2010. Barron’s explained last year’s move like this:

“...volatility isn’t simply a measure of fear. It has been used to manage risk in portfolios that employ sophisticated trading schemes…Although each type of fund adjusts to market changes at a different speed, they all respond in the same way – by selling stocks…”

There is no gauge to predict whether the VIX will remain low or bounce higher during the next 30 days, but some big name investors are feeling bearish despite the VIX’s outlook for short-term calm. Barron’s reported, “elder statesmen of the markets, including Stanley Druckenmiller, George Soros, and Carl Icahn, all have deemed themselves negative on stocks…”

Regardless, the S&P 500 Index and the NASDAQ finished the week at record levels.


Data as of 8/5/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 0.4% 6.8% 4.0% 8.5% 12.7% 5.5%
Dow Jones Global ex-U.S. -0.8 1.5 -7.5 -1.1 1.1 0.0
10-year Treasury Note (Yield Only) 1.6 NA 2.3 2.6 2.6 4.9
Gold (per ounce) -0.1 26.2 23.5 0.9 -4.2 7.5
Bloomberg Commodity Index -0.5 6.7 -7.7 -12.5 -11.7 -7.2
DJ Equity All REIT Total Return Index -2.0 16.1 21.1 14.2 15.6 7.2

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Have you lived up to your parents’ expectations? In early August, The Harvard Business Review published an article about an unexpected source of career conflict: parents! Stew Friedman, the article’s author, who is a Wharton professor and founding director of the Wharton Leadership Program wrote:

“…business professionals at various stages in life, from college students to mid-career executives, talk more about their mothers and fathers than their spouses and children as sources of career conflict. Here is a small sampling of what I’ve heard:

  • ‘My parents have always made me feel that my accomplishments fall short of expectations; I’m a disappointment to them and this undermines my confidence in choosing a career direction of my own.’

  • ‘My parents expect me to marry a particular (kind of) person, even if committing to that potential spouse would cut against my career goals.’

  • ‘My parents insist I live in a particular geographic location, but this will seriously inhibit my career options and future growth.’

  • ‘I feel obliged to care for my parents in their old age, but I cannot figure out how to coordinate the allocation of these responsibilities with my siblings; the resulting stress is a major distraction from my efforts to focus on work.’”

    While it isn’t a surprise to most people the needs and expectations of parents don’t always sync with those of their children, Friedman had some suggestions for reducing disharmony: stakeholder dialogues. In other words, initiate conversations with the people who are most important to you and discuss mutual expectations. In the end, you may gain insight to and clarity around others’ thoughts and expectations as well as the ways in which they influence your decision-making.

    Think About It

    “The first week of August hangs at the very top of summer, the top of the live-long year, like the highest seat of a Ferris wheel when it pauses in its turning. The weeks that come before are only a climb from balmy spring, and those that follow a drop to the chill of autumn, but the first week of August is motionless, and hot. It is curiously silent, too, with blank white dawns and glaring noons, and sunsets smeared with too much color.”

    --Natalie Babbitt, Author of Tuck Everlasting

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Stock investing involves risk including loss of principal.

* Consult your financial professional before making any investment decision.

Sources:

http://www.investopedia.com/articles/optioninvestor/03/091003.asp#ixzz4GYzqhPlI

http://www.ft.com/cms/s/0/cc20a9f4-5b45-11e6-8d05-4eaa66292c32.html#axzz4GYvcCAVV

http://www.barrons.com/articles/stocks-are-downand-its-your-fault-1441434205?mod=BOL_hp_we_columns

http://www.barrons.com/articles/billionaire-bears-gross-gundlach-fear-a-rout-1470459750

https://hbr.org/2016/08/what-to-do-if-your-parents-are-causing-you-career-angst

https://books.google.com/books?id=4hTN-IEZy4kC&pg=PA3&lpg=PA3&dq=The+first+week+of+August+hangs+at+the+very+top+of+summer,+the+top&source=bl&ots=B3Hv7E- ewI&sig=m_lJ5p6s12pvlxketM2ffdbUJBU&hl=en&sa=X&ved=0ahUKEwjZ19vrxa_OAhXE1IMKHXI8BQIQ6AEITDAI#v=onepage&q=The%20first%20week%20of%20August%20hangs%20at%20the%20very%20top%20of%20summer%2C%20the%20top&f=false

Weekly Market Commentary August 1, 2016

Here’s a brain tickler for you:

In July 2016, there were four.

In June 2016, there were 10.

Since 2008, there have been 673!

What are they?

If you guessed central bank rate cuts, you are on the money. Financial Times reported:

“In the eight years since the collapse of Lehman Brothers, the world’s top 50 central banks have, on average, cut rates once every three trading days…Despite a modest global recovery, central banks have barely had any time to breathe since the summer of 2008 – carrying out mass asset purchases and entering into negative rate territory. Britain’s decision to leave the EU, coupled with political instability across Europe, still subdued inflation, and concerns over Chinese indebtedness, have spurred central banks back into action.”

The latest downward adjustment came last week when the Bank of Japan (BOJ) took its key interest rate into negative territory, reported CNN Money. Negative rates are intended to promote bank lending and consumer spending. They also create a surreal situation in which banks pay customers to borrow and charge customers to keep money in their accounts.

The stimulus package that accompanied the BOJ’s rate cut was more subdued than many had expected. The Wall Street Journal said the less-than-robust stimulus prompted speculation the central bank had “run up against the limits of monetary policy” and bank leaders wanted to see more robust fiscal policy introduced by Japan’s government.

The United States has been pursuing a different course of action. The Federal Reserve has been raising rates; however, it left rates unchanged last week. More rate cuts may be ahead elsewhere, though. The Bank of England is expected to cut rates next week.

The Standard & Poor’s 500 Index finished the week slightly lower after the Commerce Department reported growth of gross domestic product (GDP) – a measure of all goods and services produced – was weaker than expected during the second quarter. GDP grew at an annualized rate of 1.2 percent during the period. Economists had expected GDP to grow by 2.5 percent, according to Bloomberg. In addition, first quarter’s GDP growth was revised downward from 1.1 percent to 0.8 percent.

Household consumption, which comprises about 70 percent of GDP, was up 4.2 percent during the second quarter, according to Bloomberg. However, those gains were offset by a decline in corporate spending on equipment, structures, and intellectual property (down 2.2 percent). That was an improvement on first quarter when corporate spending fell by 3.4 percent. Government spending declined during the second quarter, as well.


Data as of 7/29/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) -0.1% 6.3% 3.1% 8.9% 11.0% 5.5%
Dow Jones Global ex-U.S. 1.9 2.3 -6.7 -0.4 -0.8 0.0
10-year Treasury Note (Yield Only) 1.5 NA 2.3 2.6 2.8 5.0
Gold (per ounce) 1.6 26.3 23.1 0.3 -3.8 7.8
Bloomberg Commodity Index -0.4 7.3 -9.4 -12.6 -12.3 -7.2
DJ Equity All REIT Total Return Index 0.5 18.4 23.1 13.9 13.1 7.5

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

the envelope please... Every year, Kiplinger’s publishes a list of the best and worst states for retirees. The publication considers the share of each state’s population that is age 65 or older, as well as average income, average cost of living, and average healthcare costs for older Americans (relative to the national average). The economic health of each state and its citizens, and the taxes imposed on retirees also are considered.

For 2016, the best states for retirees include:

  1. South Dakota

  2. Utah

  3. Georgia

  4. Tennessee

  5. Alabama

  6. South Carolina

  7. Washington

  8. Florida

  9. Arizona

  10. Idaho

The worst states for retirees include:

  1. New York

  2. New Jersey

  3. California

  4. Connecticut

  5. Illinois

  6. Massachusetts

  7. Rhode Island

  8. Montana

  9. Vermont

  10. Wisconsin

Interestingly, taxes weren’t the most important factor in determining the states where retirees might be happiest. Just four of the most tax-friendly states in the nation made the list of best places to retire. Utah, Tennessee, Alabama, South Carolina, and Washington were all in the tax friendly category, while Idaho fell into the mixed group.

Think About It

“If a country is to be corruption free and become a nation of beautiful minds, I strongly feel there are three key societal members who can make a difference. They are the father, the mother and the teacher.”

--A. P. J. Abdul Kalam, Former President of India

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Stock investing involves risk including loss of principal.

* Consult your financial professional before making any investment decision.

Sources:

http://www.ft.com/fastft/2016/07/28/major-central-banks-have-cut-rates-672-times-since-lehman/

http://money.cnn.com/2016/01/28/news/economy/bank-of-japan-negative-interest-rate/

http://www.wsj.com/articles/has-boj-shifted-pressure-onto-japans-government-1469796930

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement-2016/index.html

http://www.kiplinger.com/slideshow/retirement/T006-S001-best-states-for-retirement-2016/index.html

http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement-2016/index.html

http://www.brainyquote.com/quotes/quotes/a/apjabdu178502.html

Weekly Market Commentary July 25, 2016

Like a cool breeze on a hot day, the post-Brexit market rally has soothed investors.

The CBOE Volatility Index (VIX), also known as the fear gauge, fell significantly during the past few weeks, according to CNBC.com. The VIX measures investors’ concerns about future volatility. The lower the Index is; the calmer investors are about the future. In late June, the VIX rose as high as 25.76. Last week, it hovered around 12.

Barron’s reported the latest advisory sentiment readings from Investors Intelligence showed bullishness at 54.4 percent, up two percentage points from last week. That’s the highest reading since April 2015 (just before the S&P 500 hit its previous record).

The relative serenity of investors has been good for markets. By the middle of last week, the Dow Jones Industrial Average (Dow) and the Standard & Poor’s 500 Index (S&P 500) were at record highs. Not everyone is convinced investor positivity is a good sign, however. Barron’s explained:

“After nearly two years of sideways trading, albeit with some large swings, the indexes finally gave what should be an important buy signal. But is it really? ...I am not talking about the simple divergence between price and volume during the June-July rally, although that certainly does not help the bulls. Nor am I considering the seasonal cycle, which teaches us to ‘Sell in May’ and sit out the usually weaker summer months. And I am not talking about any news from politics to Brexit to terrorism…What really bothers me is the lack of dissent in the bullish chorus.”

Contrarians, investors who use popular opinion as a gauge of what not to do, may find themselves leaning toward pessimism.


Data as of 7/22/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 0.6% 6.4% 2.9% 8.7% 10.1% 5.6%
Dow Jones Global ex-U.S. 0.0 0.4 -8.9 -1.4 -1.6 0.2
10-year Treasury Note (Yield Only) 1.6 NA 2.3 2.5 3.0 5.0
Gold (per ounce) -0.5 24.3 21.3 -0.2 -3.8 8.1
Bloomberg Commodity Index -2.4 7.7 -11.2 -13.3 -12.5 -6.9
DJ Equity All REIT Total Return Index 1.7 17.9 22.7 12.7 12.2 7.6

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Fake charities are on the list. Groups masquerading as charitable organizations to solicit donations from generous-minded individuals are among the twelve cons named in the Internal Revenue Service’s (IRS) ‘Dirty Dozen,’ a list of common scams targeting taxpayers.

Americans tend to be a generous bunch. During 2015, they gave more than $373 billion to charities, setting a record for the second year in a row, according to GivingUSA.org. People gave to all sorts of organizations including:

  • Religion ($119.30 billion)
  • Education ($57.48 billion)
  • Human Services ($45.21 billion)
  • Foundations ($42.26 billion)
  • Health ($29.81 billion)
  • Public-Society Benefit ($26.95 billion)
  • Arts/Culture/Humanities ($17.07 billion)
  • International Affairs ($15.75 billion)
  • Environment/Animals ($10.68 billion)

Millions more may have gone to groups pretending to be charities. The IRS offered some recommendations for avoiding scams. Before you give, get the exact name of the charity. Many fake charities use names that sound similar to those of legitimate charities.

Also, request the charity’s employer identification number and use the IRS’s Exempt Organizations Select Check search tool to review the organization’s tax status and filings. (While you’re at it, you may want to review how much the charity spends on fundraising versus programs to confirm it is spending donations judiciously.)

Once you’ve done your homework, don’t give cash. Making your donation by check or credit card provides a record for tax purposes and is more secure.

Finally, no matter how kind a charity’s representative seems on the phone or in person, do not give him or her personal financial information or other important identification data, like your Social Security number.

Think About It

“You are never too old to set another goal or to dream a new dream.”

-- C. S. Lewis, British novelist

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

Sources:

[1] http://www.cnbc.com/2016/07/19/no-fear-heres-why-the-vix-

[2] http://www.cboe.com/micro/vix/historical.aspx

[3] http://www.barrons.com/articles/as-investors-sing-a-happy-tune-smart-money-wonders-if-its-time-to-sell-stocks-1469120253

[4] http://www.barrons.com/articles/3-reasons-to-worry-that-stock-rallys-end-is-near-1469050014

[5] https://www.irs.gov/uac/Newsroom/Fake-Charities-Are-a-Problem-and-on-the-IRS-Dirty-Dozen-List-of-Tax-Scams-for-2016-1

[6] http://givingusa.org/giving-usa-2016/

[7] http://www.consumerreports.org/charitable-donations/best-and-worst-charities-for-your-donations/

[8] http://www.brainyquote.com/quotes/quotes/c/cslewis119176.html?src=t_motivational

Weekly Market Commentary July 18, 2016

“Start your engines,” was not in the Department of Labor (DOL)’s June Employment Report Summary, but it may as well have been. A positive jobs report revved investor optimism and sent U.S. stock markets sprinting higher last week.

Job growth was strong in June with 287,000 new jobs created. That helped soothe worries raised by a less than stellar May jobs report. The Wall Street Journal wrote:

“A powerful rebound in hiring last month eased fears about an economic downturn as the U.S. expansion enters its eighth year, putting the nation on solid footing to absorb global shocks and market turbulence.”

Investors appeared to agree the U.S. economic growth would continue apace. The American Association of Individual Investors (AAII)’s Investor Sentiment Survey reported bullish sentiment – the expectation stock prices will rise over the next six months – increased by 5.8 percentage points last week to 36.9 percent. That’s just the second time since November 2015 bullishness has stayed above 30 percent for two weeks in a row.

Money managers didn’t sit in the stands. The National Association of Active Investment Managers reported active managers increased their stock market exposure to 97 percent last week, which is the highest since the group began calculating the measure, according to Bloomberg.

Investors’ enthusiasm was fortified by positive earnings reports and helped some markets reach new highs. The Dow Jones Industrial Average finished Friday at a record high, according to Reuters, and Bloomberg said, “...the S&P 500 Index closed at record highs on four consecutive days, something that hadn’t happened since November 2014.”

The coup in Turkey on Friday threw a wrench into the works. Demand for safe haven assets increased, according to Bloomberg. It wouldn’t be a surprise if markets pulled back to assess.


Data as of 7/15/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 1.5% 5.8% 2.6% 8.7% 10.4% 5.8%
Dow Jones Global ex-U.S. 3.7 0.4 -9.5 -0.9 -1.0 0.4
10-year Treasury Note (Yield Only) 1.6 NA 2.4 2.7 2.9 5.1
Gold (per ounce) -2.0 24.9 15.6 1.1 -3.5 7.4
Bloomberg Commodity Index 0.4 10.4 -12.0 -12.3 -12.0 -6.8
DJ Equity All REIT Total Return Index 0.4 15.9 221.4 12.6 12.5 7.7

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Look into the crystal ball… Sure, the world has changed during the last decade or two. We’ve gained about 1.6 billion people. (There are now 7.2 billion of us, globally.) There is an app for almost everything. (Just try to ‘catch ‘em all!’) We even job hunt in cyberspace. (Make sure you customize your communications.)

Here are a few other changes that may be coming our way soon:

  • Saltwater crops. One-fifth of the world’s irrigated farmland has been swamped by seawater, and rising sea levels mean more acreage may be at risk. Phys.org reports scientists around the world have been studying how to grow salt-tolerant crops, including potatoes, strawberries, carrots, onions, and lettuce.

  • Custom-engineered bones. “For the first time, pieces of living bone have been grown from the cells of…miniature pigs – and sculpted to replace…a pig's lower jaw, one of the strongest and most complex jaws in the face,” according to LiveScience.com.

  • Smart refrigerators. Someday soon, you may replace your old refrigerator with a smart fridge. The latest models have cameras that connect to your smart phone via Wi-Fi, so you can see what’s inside while you’re shopping at the grocery store.

  • Food-sharing apps. Don’t have time to cook? Log in to a food-sharing app to “connect with people in the same area who have leftover food to give away, allowing surplus to be shared and not wasted.”

  • Dragon silk armor. Genetically modified silkworms – they now share DNA with spiders – are spinning one of the toughest fibers ever made. If it performs well in ballistic tests, the U.S. Army may soon be wearing silk.

Our parents and grandparents saw the arrival of countless innovations – the telegraph, radio, television, automobiles, space travel, and much more. We’re likely to witness some pretty amazing things, too!

Think About It

“It is important for all of us to appreciate where we come from and how that history has really shaped us in ways that we might not understand.”

--Sonia Sotomayor, Supreme Court Justice

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

Sources:

http://www.wsj.com/articles/u-s-added-287-000-jobs-in-june-1467981259

http://www.aaii.com/sentimentsurvey?a=subnavHome

http://www.bloomberg.com/news/articles/2016-07-15/s-p-500-record-setting-week-lures-cash-before-ending-with-a-thud

http://www.reuters.com/article/us-usa-stocks-idUSKCN0ZV1C2

http://www.unfpa.org/news/how-has-world-changed-last-20-years

http://www.vox.com/2016/7/13/12161974/pokemon-go-holocaust-museum-remove-pokestop

http://www.job-hunt.org/jobsearchmistakes.shtml

http://phys.org/news/2015-04-dutch-saltwater-potatoes-world-hungry.html

http://www.livescience.com/55225-living-bones-grown-in-lab.html

https://www.theguardian.com/business/2016/jul/14/tech-innovations-that-could-reduce-food-waste

http://www.livescience.com/55423-spider-silkworm-silk-protects-army-soldiers.html

http://www.brainyquote.com/quotes/quotes/s/soniasotom564458.html

Weekly Market Commentary July 11, 2016

When the yield on 10-year Treasuries finished last week at 1.37 percent, a record closing low, Barron’s called it a Kübler-Ross rally.

Elizabeth Kübler-Ross was a Swiss psychiatrist whose research identified the five stages of grief: denial, anger, bargaining, depression, and acceptance. According to Barron’s, institutional money managers have reached the final stage of grief and accepted that bond yields may remain low for some time:

“Far from irrational exuberance, many institutional investors voice resignation (or worse) to the fact that they are forced to put money to work at record low yields – 1.366 percent for the benchmark 10-year Treasury note – since that’s better than nothing, which literally is what they earn on the estimated $11.7 trillion of global debt securities with negative yields.”

The Wall Street Journal attributed record low 10-year Treasury rates to investors’ concerns about the health of the global economy, as well as “expectations that central banks in Japan and Europe will take further steps to bolster their economies, doubling down on ultra-loose monetary policies that have already helped create a record amount of negative-yielding government bonds.”

U.S. stock markets closed near record highs last week after the June employment report showed far more jobs had been created than expected. Once again, this raised questions about whether stocks are pricey in the current environment.

Barron’s explained the equity risk premium, which is the potential return investing in the stock market provides over investing in a low risk option such as a Treasury bond, is 4.6 percentage points. That’s almost the highest it has been in the past 15 years (excluding the financial crisis and the European debt crisis). However, if earnings don’t meet expectations, stocks may prove to be more expensive than they appear.


Data as of 7/8/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 1.3% 4.2% 4.1% 9.1% 9.7% 5.3%
Dow Jones Global ex-U.S. -1.5 -3.2 -8.4 -0.9 -2.2 -0.5
10-year Treasury Note (Yield Only) 1.4 NA 2.2 2.7 3.0 5.1
Gold (per ounce) 1.1 27.5 16.9 3.1 -2.6 8.0
Bloomberg Commodity Index -3.7 10.0 -11.7 -12.0 -11.7 -6.8
DJ Equity All REIT Total Return Index 1.1 15.4 22.0 13.8 11.9 7.4

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Canada, EH? If there were a beauty contest among nations, Canada would probably be crowned Miss Congeniality. The second largest country in the world – known for breathtaking temperatures (-40 degrees Fahrenheit), magnificent scenery, open spaces, and friendly natives – has captured the interest of both Brits and Americans during 2016.

Canada was the top theoretical relocation choice among Brits following the Brexit vote. According to Citylab.com, ‘move to Canada’ was one of the two most popular ‘move to…’ searches in British cities. The second was Scotland, which took first among folks living in Manchester, Birmingham, Leeds, Liverpool, and Bristol.

It’s interesting to note the top search among residents of Edinburgh and Glasgow in Scotland was ‘move to Gibraltar.’ CityLab.com opined:

“It seems unlikely that these major cities are genuinely thinking about squeezing onto a tiny rock, but Gibraltar has been on people’s minds, I suspect, because it was first to declare a referendum result (for Remain) early this morning and is now finding itself under high-profile pressure for power-sharing from Spain.”

U.S. Internet searches for the phrase ‘how to move to Canada’ were quite popular this year, too, according to The Economist. The search reached its 2016 crescendo to-date after the Super Tuesday primaries in March. Donald Trump won seven states and Hillary Clinton won seven states and American Samoa.

It wasn’t the first time American presidential election choices inspired such angst among its citizens. ‘Move to Canada’ was a popular search phrase in 2004 after George W. Bush defeated John Kerry.

Regardless of the popularity of the search phrase, the number of American and British people who have migrated to Canada remains quite low. During each of the last 10 years, just 15,000 people from both nations together have sallied forth into the Great White North to become Canadian citizens.

Think About It

“Aaah, summer – that long anticipated stretch of lazy, lingering days, free of responsibility and rife with possibility. It's a time to hunt for insects, master handstands, practice swimming strokes, conquer trees, explore nooks and crannies, and make new friends.

--Darell Hammond, Founder and CEO of KaBOOM

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

*International debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards. These risks are often heightened for investments in emerging markets.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

Sources:

http://www.barrons.com/articles/can-low-rates-keep-lifting-the-stock-market-1468037259?mod=BOL_hp_we_columns

http://www.ekrfoundation.org/five-stages-of-grief/

http://www.wsj.com/articles/u-s-government-bond-yields-rise-on-healthy-jobs-report-1467982581

http://www.cbsnews.com/news/employment-report-u-s-added-287k-jobs-in-june/

http://www.barrons.com/articles/dont-get-too-comfortable-with-stocks-1468037247?mod=BOL_hp_we_columns

http://www.bbc.com/news/world-us-canada-36730174

http://www.citylab.com/tech/2016/06/whats-the-british-equivalent-of-threatening-to-move-to-canada/488672/?utm_source=nextdraft&utm_medium=email

http://www.nytimes.com/interactive/2016/us/elections/primary-calendar-and-results.html

http://www.economist.com/blogs/graphicdetail/2016/07/daily-chart

http://www.brainyquote.com/quotes/quotes/d/darellhamm522873.html

Weekly Market Commentary July 5, 2016

Second quarter ended with a spectacular finale of Brexit-inspired market volatility.

Investors typically welcome sharp market movements with about the same level of enthusiasm that canines show for fireworks. However, recent market agitations highlighted a key tenet of investing: Volatility often creates opportunity. Following an initial Brexit sell-off, global markets rebounded. Last Friday, Financial Times reported:

“Global equity indices continued their stunning post-Brexit vote recovery, “core” government bond yields hovered near record lows, and sterling stayed in sight of a three-decade trough against the dollar as a tumultuous week in the markets drew to a close. The dollar finished the week on a broadly softer note, helping gold stay in sight of the two-year high it struck five days earlier. Oil prices were volatile but Brent regained the $50 a barrel mark in late trade.”

During the first half of 2016, opportunities weren’t always where investors might have expected to find them. Barron’s reported stocks have become income providers and bonds have been delivering capital gains. “With dividends included, the Standard & Poor’s 500 index returned 3.84 percent in the year’s first six months, according to Bianco Research. Meanwhile, the Treasury’s benchmark 10-year note returned roughly twice that, 7.97 percent...”

Some of the strongest stock market performance was found in emerging markets. On July 1, MarketWatch reported the best and worst (in italics) performing indices for the first half of 2016:

  • Argentina (Merval) 25.77 percent

  • Russia (RTS Index) 22.95 percent

  • Brazil (Bovespa) 18.86 percent

  • Pakistan (KSE 100) 15.14 percent

  • Canada (S&P/TSX) 8.11 percent

  • China (Shenzhen A Shares) -14.49 percent

  • China (Shanghai A Shares) -17.22 percent

  • China (SSE Composite) -17.22 percent

  • Japan (Nikkei 225) -18.17 percent

  • Italy (FTSE MIB) -24.37 percent

The three major Chinese indices on the list serve as a reminder that, not too long ago, concerns about the health of the global economy and the world’s financial markets focused on China. Today, the stethoscope is pressed to the heart of the European Union.

Predictions of higher interest rates in the United States have become a perennial that never blooms. Coming into 2016, the Federal Reserve was expected to increase the fed funds rate four times, making bonds appear an unwise investment choice. As mentioned, the 10-year Treasury note did just fine. However, the likelihood of the Fed raising rates fell during the quarter. Barron’s reported, “Based on Eurodollar futures prices, the U.S. central bank is likely to keep its federal-funds target steady well into next year and perhaps until 2018.”

During the last week of June, the Dow Jones Industrial Average and the Standard & Poor’s 500 Index each experienced their best performance since November 2015, according to MarketWatch.


Data as of 7/1/16
1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor's 500 (Domestic Stocks) 3.2% 2.9% 1.2% 9.2% 9.4% 5.1%
Dow Jones Global ex-U.S. 3.4 -1.7 -11.5 -0.7 -1.9 -0.4
10-year Treasury Note (Yield Only) 1.5 NA 2.4 2.5 3.2 5.2
Gold (per ounce) 1.9 26.2 14.7 2.5 -2.0 8.0
Bloomberg Commodity Index 3.1 14.2 -11.7 -10.6 -10.6 -6.4
DJ Equity All REIT Total Return Index 4.8 14.1 22.6 13.6 12.1 7.3

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.

Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Where did your wealth come from? The 2016 U.S. Trust Insights on Wealth and Worth Survey® asked wealthy Americans about their financial success. They found a majority of wealthy Americans did not inherit their wealth:(Page 4)

  • 52 percent earned their wealth through work or entrepreneurial efforts

  • 32 percent gained affluence through investing

  • 10 percent inherited their money

  • 6 percent relied on other means of accumulating wealth

The wealthy reported their parents emphasized the importance of academic achievement (76 percent), financial discipline (68 percent), and hard work (63 percent).(Page 4)

In addition, they said it’s important to find ways to have a positive impact on the world around them by volunteering their time (61 percent), giving money (74 percent), serving on boards (47 percent), and working for non-profit organizations (16 percent).(Pages 5 & 16)

In fact, the popularity of impact investing is growing. Wealthy Americans said investing for positive social impact is important because:(Pages 16-17)

  • It’s the right thing to do (54 percent)

  • Corporate America should be accountable for its actions (53 percent)

  • I want to have a positive impact on the world (49 percent)

  • Companies that are good corporate citizens are less susceptible to business risk (40 percent)

  • Companies that are good corporate citizens have better financial performance (38 percent)

The issues that were of greatest concern included: environmental protection and sustainability; healthcare quality and access; disease prevention, treatment, or cure; and education.(Page 15)

Think About It

“Afoot and light-hearted I take to the open road,

Healthy, free, the world before me,

The long brown path before me leading wherever I choose.

Henceforth I ask not good-fortune, I myself am good-fortune,

Henceforth I whimper no more, postpone no more, need nothing,

Done with indoor complaints, libraries, querulous criticisms,

Strong and content I travel the open road…”

--Walt Whitman, American poet

Need some Personalized Advice?

Contact us and we will be happy to point you in the right direction.  No bull.

* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

*The fast price swings in commodities and currencies will result in significant volatility in an investor’s holdings.

* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.

* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.

* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.

* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* Past performance does not guarantee future results. Investing involves risk, including loss of principal.

* You cannot invest directly in an index.

* Consult your financial professional before making any investment decision.

* Stock investing involves risk including loss of principal.

Sources:

http://www.ft.com/cms/s/0/695db2b6-3f3a-11e6-9f2c-36b487ebd80a.html#axzz4DGMPWq66

http://www.barrons.com/articles/markets-confound-in-years-first-half-1467433715?mod=BOL_hp_we_columns

http://www.marketwatch.com/story/these-stock-markets-left-the-rest-of-the-world-in-their-wake-so-far-this-year-2016-07-01

http://www.marketwatch.com/story/us-stocks-struggle-to-hold-on-after-3-day-rally-2016-07-01

http://www.ustrust.com/publish/content/application/pdf/GWMOL/USTp_ARWCS8LX_Transcript_2017-05.pdf

http://www.poetryfoundation.org/poems-and-poets/poems/detail/48859