Greetings!
In a recent episode of Frozen Planet, a pack of wolves surrounds a buffalo herd in a snowy wasteland. If the buffaloes stick together, none of them will die. They are each vastly more powerful than many wolves. However, if they panic, one of them will be overtaken by the wolves and die.
The wolves snap and howl, and the buffaloes circle together, winning but becoming more alarmed the longer the wolves persist. Finally, one buffalo panics and the herd takes off. A child buffalo is slower than the rest... You can imagine what happens next.
What can we learn from this situation? Investing is a battle of emotions. We know the right strategy and yet we are scared to stick with it when the wolves are chomping at our shins. We know stocks are historically the best investment class, over the long haul, and in the short-term, they are terrifying. We know that good companies with good management teams will find ways to make money in all kinds of markets.
We will always make things, provide services, and so will others. People will exchange what they produce for what others produce. This is the essence not only of capitalism, but of community.
Interestingly, in Frozen Planet, one large buffalo lagged the others. He stood his ground. As the wolves approached he stampeded. Between him and the herd was the aforementioned young buffalo. The bull lowered his head and ran over the young guy, sacrificing him for the sake of the herd. A very disturbing scene, and one that shows, in many ways, the dangers of acting in a panic. |
| Weekly Economic Update | |
CONSUMER CONFIDENCE HIGHEST SINCE 2007 In a tense week for investors, some promising news emerged: the closely watched Thomson Reuters/University of Michigan consumer sentiment index came in with a final reading of 79.3 for May - the ninth straight monthly improvement. May's 3.8% gain brought the index to a peak unseen since October 2007. The survey's current conditions index rose 5.2% in May to 87.2, the best reading in that category since January 2008. (1)
HOMEBUYING PICKS UP
More good news: sales of new and existing homes improved in April. Last week, the Census Bureau reported a 3.3% April rise in new home purchases, just after the National Association of Realtors noted a 3.4% gain in residential resales for the month. In April, the pace of existing home sales nearly matched that of January - and January was the best month for the indicator in two years. (2)
DURABLE GOODS ORDERS INCREASE 0.2%
The overall April gain refuted the forecast of economists polled by MarketWatch - they felt orders would decrease 0.4% after a revised 3.7% drop for March. However, hard goods orders did fall 0.6% in April with transportation orders factored out. (3)
STOCKS MANAGE GAINS
For much of the week, Wall Street's collective mind was on two things: ongoing capital flight from European banks and the risk of Greece exiting the euro. Thanks to some positive data stateside, and despite the debut of social media giant Facebook (down 17.4% in its first week as a publicly traded company), stocks broke a 3-week losing streak. The numbers across five trading days: S&P 500, +1.74% to 1,317.82; DJIA, +0.69% to 12,454.83; NASDAQ, +2.11% to 2,837.53. NYMEX crude (-0.68% for the week) settled at $90.86 Friday while COMEX gold (-1.44% on the week) settled at $1,568.90. (4) |
| Market Summary |
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% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
+1.94 |
+0.49 |
-1.56 | |
NASDAQ |
+8.92 |
+2.76 |
+2.19 | |
S&P 500 |
+4.79 |
-0.20 |
-2.61 |
(Source: msn.money.com, bigcharts.com, treasury.gov, treasurydirect.gov - 5/25/12). 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 - thomsonreuters.com/content/financial/pdf/i_and_a/
438965/gains_in_confidence_depends_on_job_growth.pdf [5/25/12]
2 - www.cbsnews.com/8301-500395_162-57439946/solid-rise-in-new-home-sales/ [5/23/12]
3 - articles.marketwatch.com/2012-05-24/economy/31831869_1_orders-for-long-lasting-goods-aircraft-and-parts-orders-durable-goods-orders [5/25/12]
4 - money.msn.com/market-news/post.aspx?post=84efdd91-09d9-46c5-befa-9110478068c4 [5/25/12]
5 - montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [5/25/12]
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 |
"Success is how high you bounce when you hit bottom."
George S. Patton |
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Riddle of the Week
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Five girls took part in a bicycle race. Barbara finished before Vicki but behind Susan. Katarina finished before Sara but behind Vicki. In what order did they finish?
Last week's riddle:
You need to park a car for the weekend. You find a parking space marked "2-Hour Parking M-F, 8am-6pm" with no other restrictions. You call the city and find that overnight parking is allowed on this block. So, what is the maximum amount of time you can leave your car in this space without getting a ticket?
Last week's answer:
66 hours. You can park in the space from 4pm Friday until 10am Monday. |
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Karl Frank was interviewed by 9News on March 28th, 2012 regarding "3 Things You Should Do if You Win the Mega Millions Lottery". | |
Click Here to View Video
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Karl Frank In Investment Advisor Magazine |
 | | Investment Advisor - November 2011 |
Investment 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. |
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