Pat Webb - Phase 2 Advisors
 
Weekly Update - August 15, 2011

"This Too Shall Pass"

In This Issue
Performance
Headlines
Recipe
Golf Tip
Health Tip
A recent article from the New York Times that was reprinted by CNBC, likened the late-2000s recession to an earthquake, and recent volatility to aftershocks. The article said: "Like earthquakes, financial crises seem to be accompanied by aftershocks, like the one we've been living through this week. They can feel every bit as bad as the crisis itself. But economic history and academic research suggest they can set the stage for a sustainable recovery - and eventual sharp stock market gains."[1]  We found this to be a particularly fitting illustration, and a valid point.

It's no secret that dizzying stock market moves in recent weeks have been difficult to stomach. Think of all the events we've had to face leading up to this - controversy in Washington over the debt ceiling, Standard & Poor's downgrade of America's prized credit rating, renewed fears about European debt, and a gut-wrenching plunge in the stock market. The uncertainty of everything culminated in the wild ride we took last week.

To recap: On Monday the Dow Jones Industrial Average fell almost 635 points, then rose nearly 430 points on Tuesday, only to see another drop of almost 520 points on Wednesday. Helped by some positive earnings results, the Dow soared 423 points Thursday and another 125 points on Friday. By week's end, the benchmark index had closed at 11,269 and shed only 1.5% for the week.[2] The S&P 500 Index logged similar performance. You might want to take a deep breath after reading this paragraph.


Do we expect a measure of volatility to continue? There is a good possibility that it will, at least for a time. As long as confidence in the global economy and government policymakers remains shaky, markets are likely to be volatile. Even so, we still believe that fundamentals are strong, and we know that successful investing is a long term project undertaken with risk and uncertainty. Equity markets do not move in a straight line, and neither do economic recoveries. Despite being painful, volatile periods like this historically run their course and then come to an end. To quote an ancient proverb, "this too shall pass."

ECONOMIC CALENDAR:                                       
Monday - Empire State Mfg Survey, Housing Market Index
Tuesday - Housing Starts, Import and Export Prices, Industrial Production             
Wednesday -Producer Price Index
Thursday - Consumer Price Index, Jobless Claims, Existing Home Sales, Philadelphia Fed Survey, Leading Indicators                         


Performance


8_15 Chart

Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized.
Sources: Yahoo! Finance, MSCI Barra. Past performance is no guarantee of future results.
Indices are unmanaged and cannot be invested into directly. NA means not available.

Headlines

Italy's government has approved sharp budget cuts demanded by the European Central Bank despite regional opposition to the move. Italian officials said Friday the austerity measures include $28 billion in cuts next year and $35 billion in 2013.[3]

The number of Americans claiming new jobless benefits fell to a four-month low last week, the Labor Department said in its weekly report, providing a ray of hope for the nation's battered economy. Initial claims for state unemployment benefits fell 7,000 to a seasonally adjusted 395,000, the Labor Department said, the lowest level since early April. Economists had expected a reading of 400,000.[4]


The tumbling price of crude oil this month and signs of falling fuel demand point to lower U.S. gasoline prices ahead, though consumers will have to wait for savings to trickle down to the pump. After reaching an almost three-year high of $3.97 a gallon in early May, U.S. retail gasoline prices have fallen nearly 30 cents on a combination of lower oil prices and flagging sales in the important summer-driving season.[5]

The Securities and Exchange Commission has asked credit rating agency Standard & Poor's to disclose who within its ranks knew of its decision to downgrade U.S. debt before it was announced last week, as part of a preliminary look into potential insider trading, people familiar with the matter say.[6]

 


Quote of the Week
"Do you want to know who you are? Don't ask. Act! Action will delineate and define you."
- Thomas Jefferson
Recipe of the Week
Minted Strawberries with White Wine

8_15 Recipe

From: Better Homes and Gardens

Ingredients:

6 cups strawberries  

1 cup sugar  

2 bunches fresh mint (1-1/2 oz.)  

2 to 3 cups dry white wine such as Sauvignon Blanc  

Fresh mint sprigs

 

Directions:

1) Halve large berries; leave hulls on a few berries. Place berries in a large bowl; sprinkle with sugar and cover bowl with plastic wrap. Let stand at room temperature at least 1 hour, stirring once or twice.

2) Remove mint leaves from one bunch of mint. Stack 6 to 8 leaves together; roll the stacked leaves. Slice across the roll to create narrow strips. Repeat with remaining leaves. Add the shredded mint to strawberries just before serving.

3) To serve, evenly divide the minted berries and juices among 8 glasses; pour wine over berries until just covered. Garnish with mint sprigs. Makes 8 servings.

 

 

 
Golf Tip
Better Chipping

 

To be consistent while chipping, you must use the proper body motion. The arms and shoulders should form a triangle in front of the center of the body, and this "triangle" must stay intact throughout the swing. Without the triangle thought, it is easy to overuse the arms and hands.

 

To create a better chipping stroke, try the following drill:

 

Towel Under The Arms - Place a small, rolled towel under each arm and practice chipping. This will help you connect your upper arms to your chest. When doing this drill, be sure to keep your head still and to rotate your entire upper body while swinging.


Healthy Lifestyle
Safe Grilling

Everyone enjoys a summer barbecue, but it's wise to follow some safety guidelines. To avoid burns, always keep the grill clean, remove all fats, and use wood starters for charcoal. To avoid food poisoning, use proper hygiene by washing your hands and using separate plates for raw and cooked meats. To ensure that meats are fully cooked, check temperatures with a thermometer. Enjoy your BBQ!

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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

 

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

 

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq. The DJIA was invented by Charles Dow back in 1896.

 

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.

 

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.

 

Google 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.

 

Past performance does not guarantee future results.

 

You cannot invest directly in an index.

 

Consult your financial professional before making any investment decision.

 

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

 

These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative or named Broker dealer, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

 

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[1] http://www.cnbc.com/id/44130283 

[2] http://www.google.com/finance?q=indexdjx:.dji

[3] http://www.voanews.com/english/news/europe/Italy-Approves-Cuts-to-Balance-Budget-by-2013-127651063.html

[4] http://www.nytimes.com/2011/08/12/business/economy/jobless-claims-drop-but-trade-deficit-rises.html

[5] http://online.wsj.com/article/SB10001424053111903918104576504702739994840.html  

[6] http://www.cnbc.com/id/44099845


Pat Webb
Pat Webb - Phase 2 Advisors
8100 Turman Ct
Fort Collins, CO 80525
970-776-3306
patwebb@phase2adv.com
http://www.phase2adv.com