Greetings!
Current surveys show the affluent are among the most pessimistic about the economy. Rather than investing in stocks or companies that can create jobs, they are betting on continued volatility and slow growth by hoarding cash, gold and other safety assets.
 | | Source:Wall Street Journal, Monday August 15th, 2011 |
After last week's record-setting crash and partial recovery, is there any doubt that short-term risk permeates all aspects of investing today?
Patience is the guide. Try not to be a trader. Instead, call your advisor and ask what risks we're taking and what risks we are avoiding. Consider learning more about the investments in the AIFS menu that include non-traded investments. Today, politics drive investing. The good news about that is that politics get old fast, so it can only be a short-term decision-changer.
But the political risks are great in the US, and maybe greater overseas. In fact, some folks think 2011 is worse than 2008: Read more here |
RISING GAS PRICES KEY FACTOR IN INFLATION SPIKE
The federal government's Consumer Price Index recorded a 0.5% inflation increase for July. Gasoline prices rose 4.7% during the month; food prices rose 0.4%. Core CPI advanced 0.2%. Producer prices rose as well - the Labor Department's July Producer Price Index posted a 0.2% increase, with core PPI up 0.4%. Economists surveyed by Reuters had expected gains of just 0.2% in overall CPI and 0.1% in overall PPI for the month.(1,2)
EXISTING HOME SALES DECLINE IN JULY
The National Association of Realtors noted a 3.5% fall in residential resales for July. While the rate of existing home sales hit an 8-month low last month, sales in July were still up 21% from a year ago (the federal homebuying credit expired in July 2010). The median sale price was $174,400, down 4.4% from a year ago.(3)
$1,800 GOLD IS HERE; OIL MOVES LOWER
Gold settled at $1,852.20 per ounce on the COMEX Friday; the precious metal is on track for its best month in 12 years, and the gold bull market has now run for more than 1,000 days. Oil settled at $82.26 on the NYMEX Friday, wrapping up its fourth straight down week.(4,5)
GAINS IN INDUSTRIAL OUTPUT, LEADING INDICATORS
The Conference Board Leading Economic Index advanced 0.5% in July to follow an 0.3% rise in June and an 0.7% gain in May. Industrial output increased by 0.9% in July according to the Federal Reserve - the best month for that indicator since December. Auto production alone improved 5.2% for the month.(6,7)
STOCKS UNDER PRESSURE
The ongoing debt crisis in Europe, disappointing U.S. economic indicators and some subpar earnings reports all did some damage. So it was a negative week for the big Wall Street benchmarks: DJIA, -4.01% to 10,817.65; S&P 500, -4.69% to 1,123.53; NASDAQ, -6.62% to 2,341.84.(8)
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| Market Summary |
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% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
-6.56 |
+5.32 |
-0.99 | |
NASDAQ |
-11.72 |
+7.48 |
+1.64 | |
S&P 500 |
-10.66 |
+4.45 |
-2.75 |
(Source: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov - 8/19/11). Past performance is no guarantee of future results. Indices are unmanaged, and investors cannot invest in them directly. |
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Create a beautiful week!
Karl Frank, MBA, MSF
Certified Financial Planner (R)
A & I Financial Services LLC
303.690.5070
Citations:
1 - forbes.com/sites/afontevecchia/2011/08/18/cpi-jumps-stoking-fears-of-stagflation/ [8/18/11]
2 - reuters.com/article/2011/08/17/businesspro-us-usa-markets-tips-idUSTRE77G2TS20110817 [8/17/11]
3 - marketwatch.com/story/sales-of-existing-homes-fall-35-in-july-2011-08-18-1011410 [8/18/11]
4 - cnbc.com/id/44197669 [8/19/11]
5 - cnbc.com/id/44197671 [8/19/11]
6 - conference-board.org/data/bcicountry.cfm?cid=1 [8/19/11]
7 - reuters.com/article/2011/08/16/usa-economy-idUSN1E77F0B620110816 [8/16/11]
8 - cnbc.com/id/44202341 [8/19/11]
This material has been prepared and is distributed solely for information purposes only. It is not a solicitation or an offer buy any securities or instrument or to participate in any trading strategy. There is no assurance that a particular trading strategy will achieve investment success.
Securities offered through Geneos Wealth Management, Inc., member FINRA/SIPC. Investment advisory services offered through A & I Financial Services LLC, registered investment advisor.
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| Words for Thought |
Is there anything better than to be longing for something, when you know it is within reach?" Greta Garbo |
| Watch Karl Frank's interview on MoneyLine9 9NEWS on May 9, 2011 | |
Click Here
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| Watch Karl Frank on Channel 9 News & Read his article "Where to Invest in Times of Turmoil" | |
Click Here
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| Read about us in the Denver Post | |
Karl Frank & Cameron Morgan were featured in the Denver Post. They talked about how to have a happy holiday while sticking to a budget.
Click here to read the article. |
| Riddle of the Week |
What surrounds everyone and is the end of time and space?
Last week's riddle:
There are 2 nouns in the English language that become men's names when you capitalize them - and when you capitalize them, you alter their pronunciation. Name either or both of these 2 nouns, both of which end in 'b'.
Last week's answer:
Herb and Job |
| Community Events | |
The Denver Business Journal and the Hyatt Regency Denver Tech Center present "Women in Business BizMix" a networking mixer exclusiviely for women.
Monday, August 29th
5:30 - 7:30 PM
Hyatt Regency DTC
7800 E. Tufts Ave.
Denver, CO 80237
If you have any qustions please e-mail Kelly at Kmartin@bizjournals.com or call 303-803-9279 to sign up.
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