A&I Financial Services Periscope

A & I Financial Services LLC Newsletter

For the Week of
March 8, 2012
 
Greetings!  

As I speak to our wonderful clients, regardless of where we come from and where we want to go, some common themes include our limited time and our health. So often, we hear about the decline of the US and other English-speaking countries, both with our aging population and our declining health, particularly our obesity problems.

 

This week, let's turn the tables and not talk about our health in isolation. Let's compare it to the rest of the world. I think you might, as I do, come to the conclusion we are in a relatively good space.

 

In fact, a recent article did such a good job of reporting this that I'm just going to quote them at length: Joel Kotkin and Shashi Parulekar in the Winter 2012 issue of City Journal:  (8)

 

"Between 1980 and 2010, the U.S., Canada, and Australia saw big population surges: the U.S.'s expanded by 75 million, to more than 300 million; Canada's nearly doubled, from 18 million to 34 million; and Australia's increased from 13 million to 22 million.

 

The U.S. now has 20 people aged 65 or older for every 100 of working age - only a slight change from 1985, when there were 18 for every 100. By 2030, the U.S. will have 33 seniors per 100 working Americans."

 

The negative way to look at this is that by 2030, 3 people will be working for every one person receiving a Social Security Benefit. But I digress. Let's get back to the article:

 

"Consider the numbers elsewhere. In the world's fourth-largest economy, Germany already has 33 elderly people for every 100 of working age - up from only 21 in 1985. By 2030, this figure will rise to 48, meaning that there will be barely two working Germans per retiree. The numbers are even worse in Japan, which currently has 35 seniors per 100 working-age people, a dramatic change from 1985, when the country had just 15. By 2030, the ratio is expected to rise to 53 per 100.

 

Meanwhile, the nation that so many point to as the twenty-first-century superpower, China, now has a fertility rate of 1.6, even lower than that of Western Europe. Over the next two decades, its ratio of workers to retirees is projected to rise from 11 to 23. Other countries, such as Brazil and Iran, face similar scenarios. These countries, without social safety nets of the kinds developed in Europe or Japan, may get old before they can get rich.

 

Between 2000 and 2050, for example, the U.S. workforce is projected to grow by 37 percent, while China's shrinks by 10 percent, the EU's decreases by 21 percent, and, most strikingly, Japan's falls by as much as 40 percent."

 

What do you think?

Weekly Economic Update 

 

A GAIN (OF SORTS) IN CONSUMER SPENDING
The Commerce Department noted a 0.2% rise in personal spending in January along with a 0.3% rise in wages. However, real consumer spending was flat for the third consecutive month when adjusted for inflation. Headline personal spending rose 2.1% in Q4 2011. Many economists expect a comparable gain this quarter. In related news, the Bureau of Economic Analysis revised Q4 GDP north to 3.0% last week.(1,2,3)
  
DURABLE GOODS ORDERS, ISM INDEX DECLINE
While the Institute for Supply Management's manufacturing index spent its 31st consecutive month above 50, it did dip 1.7% in February to 52.4 - well below the 54.7 consensus forecast among economists polled by Briefing.com. Last week, the Commerce Department said that hard goods orders decreased 4.0% in January (the expiration of the 2011 tax break on capital investment was likely a factor). (2,3,4)

 

HOME PRICES SLIP, BUT SALES CONTRACTS INCREASE
The good news: pending home sales increased 2.0% in January according to the National Association of Realtors. Economists polled by Briefing.com had forecast only half that gain. The not-so-good news: December's S&P/Case-Shiller Home Price Index revealed a 3.8% monthly decline and a 4.0% annual retreat in existing home prices. (3,5)

 

S&P & NASDAQ ADVANCE; DOW HAS A FLAT WEEK
Friday, the DJIA settled at 12,977.57, the NASDAQ at 2,976.19 and the S&P 500 at 1,369.13. The Dow lost 0.04% from Monday to Friday while the S&P and NASDAQ respectively gained 0.28% and 0.42%. Retail gasoline prices were averaging $3.74 a gallon nationally on Friday; oil futures lost 2.80% last week to settle at $106.70 per barrel. Gold retreated 3.75% on the COMEX for the week to settle at $1,709.80 an ounce Friday.(6,7)

Market Summary

% Change

Y-T-D

1Yr Chg

5-Year Avg

DJIA

+6.22

+7.55

+1.43

NASDAQ

+14.24

+8.30

+5.14

S&P 500

+8.91

+4.64

-0.26

(Source: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov - 3/2/12).  Past performance is no guarantee of future results.  Indices are unmanaged, and investors cannot invest in them directly.
Create a beautiful week!

Karl Frank, MBA, MSF
Certified Financial Planner (R)
A & I Financial Services LLC
303.690.5070
 
Citations:   

 

(1) - www.dailyfinance.com/article/consumers-spend-more-after-incomes-rise/1866063/ [3/1/12]
(2) - www.reuters.com/article/2012/03/01/usa-economy-idUSL2E8E11BN20120301 [3/1/12]
(3) - briefing.com/investor/calendars/economic/2012/02/27-02 [3/2/12]
(4) - www.ism.ws/ISMReport/MfgROB.cfm [3/1/12]
(5) - www.charlotteobserver.com/2012/02/29/3054668/
housing-slump-continues.html [2/29/12]
(6) - money.msn.com/market-news/post.aspx?post=a88fef67-2cc0-41dc-8ce3-34d5cd866ed9&_nwpt=1 [3/2/12]
(7) - montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [3/2/12]
(8) - Source: http://www.city-journal.org/2012/22_1_
anglosphere.html
 
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

"We may encounter many defeats but we must not be defeated."

 

Maya Angelou

Karl Frank In  Investor Advisor Magazine

Holiday header
Investor Advisor - November 2011
 
Investor Advisor Magazine's November 2011 edition features Karl Frank.  In the article "Never Satisfied," John Sullivan writes:  Passion born of tragedy drives Karl Frank to do all he can to help business owners ensure a legacy for loved ones and heirs.  Industrial age publisher and philanthropist Frederick Bonfils said there is no hope for the satisfied man. If that's the case, Karl Frank is full of hope. 

 

"I'm never satisfied," Frank says matter-of-factly when asked about his advisory firm

.....Read More.

Karl Frank was interviewed by 9News on January 9, 2012 regarding "Key Questions to ask when picking a financial advisor". 

Click Here to View Video 

 

 

 

 

  Riddle of the Week

 

Two fathers and two sons shopped for computers at their local big box retailer. Each bought a PC, yet they bought only three PCs total. How could this be? 

 

Last week's riddle:

 

Name the three English-language three-letter words that begin and end with the letter E.

   

   

Last week's answer:  

 

 

Eve, Ewe and Eye