Market Update  

As you well know, this year has been quite volatile and your account balances have likely reflected that volatility. The portions of your portfolio allocated to international investments (1), small and mid-sized U.S. companies, and convertible bonds (2) have likely underperformed the S&P 500 (3) year-to-date and over the past year. Areas of your portfolio that have likely outperformed the market may include bonds and privately held REITs (4).

I anticipate that the ups and downs of the past two years may continue over the next few years. In my opinion, the market lacks clear direction because the economy has yet to strengthen or soften to a point in which the market will take off or slide. While businesses have continued to fair well, ordinary citizens still suffer from a high unemployment rate and lack of steady pay increases.

Over the past two years, the primary driver of the markets' fluctuations has come from international strife. This is primarily due to Greece's economic issues as well as concerns of bank default. While Greece's troubles may continue, I believe that other European governments (especially Germany and France) will come through with a bailout package to sure up their economy and protect the financial institutions.

Another short-term market driver will be the upcoming presidential and congressional elections. The President has shown little ability to get anything accomplished with a Republican controlled House. It's entirely possible that something will give as a result of the elections. We could see citizens who are tired of a political stalemate and who are tired of seeing the economy stagnate come through and change the parties in control of the White House and/or congress. Regardless of the outcome of the election, the markets need clarity in order to have consistent direction.

I believe that we may see recovery in the markets over the next six months as Europe's economic issues likely improve. Absent a catastrophe, the balance of 2012 may be decided by the elections.

As always, consult a financial advisor regarding your specific situation. This article is for information purposes only is not intended to provide advice, recommendations, or solicitations to invest.

(1) International and emerging market investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

(2) Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values and yields will decline as interest rates rise and bonds are subject to availability and change in price.

(3) The Standard & Poor's 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes of the aggregate market value of 500 stocks representing all major industries.

(4) Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be obtained.

Our 6th Annual Paws for a Cause fundraiser was a huge success!  We raised nearly $9,000 for BARCS, Lucky Cat Rescue, and Furry Friends Network.  Thanks to all who came out for the event, volunteered, and donated to the cause!

Office Closings in November...

Just a reminder ...

We are always accepting donations for the local animal shelters - toys, tennis balls, collars, leashes, food, cat litter, cardboard trays, office supplies, cleaning supplies, towels, mats, washcloths, etc. We will accept donations Monday-Friday between 8:30am & 4:30pm.