Greetings!
Last week, a friend of ours found himself stuck on the side of Interstate 25 when his car overheated. He called a relative for assistance and said, "My car is overheating, I need some water."
When his relative arrived, he gave our friend a bottle of ice cold Perrier. Without skipping a beat, our friend says, "It's a German car. It would balk at getting Perrier!"
They drove together to a gas station and bought some radiator coolant.
Many of America's Baby Boomers are asking for water and getting Perrier. They are offered solutions that are well-intended but not helpful.
The number one challenge we face, the one that will drive our economic decisions for decades, is demographic. Baby Boomers will live longer than they expected and they will be healthier (for longer) than they ever imagined. And many Boomers are unprepared.
2012 is a year full of distractions, including a Presidential election and (another) foriegn debt crisis. Upon its conclusion, the demographic challenge will be one year older and the pressure to solve these demographic problems will increase.
Saving and investing with a time horizon measured in decades, not days, is the only answer we have to this demographic challenge measured over the long term. |
| Weekly Economic Update | |
MARKETS RALLY ON BOLD EU PROPOSAL
Last week, European leaders crafted a new plan to help the continent's beleaguered banks: eurozone rescue funds would be used to directly recapitalize troubled lenders, without contributing to existing sovereign debt. A single supervisory body would also be created to serve as a banking watchdog. Key details need to be ironed out, but Wall Street loved the news - the Dow gained 278 points Friday. (1)
HEALTH CARE REFORMS (LARGELY) STAND
In a 5-4 vote last week, the Supreme Court upheld the individual insurance mandate within 2010's Affordable Care Act. In the majority opinion, Chief Justice John G. Roberts, Jr. characterized the mandate as a tax permitted under the Constitution. The high court did rule that the law's expansion of Medicaid violated states' rights. (2)
ENCOURAGING DEVELOPMENTS IN REAL ESTATE
The National Association of Realtors said that its pending home sales index rose 5.6% in May to 101.1 - the highest level in two years, and a number characteristic of a "healthy" residential real estate market. New home sales rose 7.6% in May to a pace unseen since April 2010, the Census Bureau noted. Freddie Mac said average interest rates on conventional home loans hit a new low last week at 3.66%. (3)
NO GAINS IN CONSUMER SPENDING OR CONFIDENCE
Personal spending was flat in May, and the Commerce Department revised April's gain to just 0.1%. The Conference Board's June consumer confidence survey fell to 62.0 from May's revised 64.4 reading; June's final University of Michigan consumer sentiment survey dropped down to 73.2 from May's final 79.3 mark. (4,5)
OIL, GOLD, EQUITIES ALL RISE
Friday, the S&P 500 (1,362.16), NASDAQ (2,935.05) and DJIA (12,880.09) all settled at highs unseen since May 8. For the week, the Dow gained 1.89%, the S&P 2.03% and the NASDAQ 1.47%. Oil settled Friday in New York at $84.96 a barrel, leaping $7.27 in a day; gold jumped $53.80 to close the week at $1,604.20 an ounce on the COMEX. (1,6)
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| Market Summary |
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% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
+5.42 |
+5.05 |
-0.79 | |
NASDAQ |
+12.66 |
+7.10 |
+2.55 | |
S&P 500 |
+8.31 |
+4.19 |
-1.88 |
(Source: msn.money.com, bigcharts.com, treasury.gov, treasurydirect.gov - 6/29/12). 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 - money.msn.com/market-news/post.aspx?post=95f998bd-6fbe-4de1-9b51-8cb1f437973a [6/29/12]
2 - www.latimes.com/news/politics/la-pn-justice-roberts-leads-supreme-court-support-of-healthcare-law-20120628,0,3606595.story [6/28/12]
3 - www.mercurynews.com/business/ci_20963751/look-at-
us-housing-market-at-glance [6/28/12]
4 - www.reuters.com/article/2012/06/29/usa-economy-
idUSL2E8HT2ZG20120629 [6/29/12]
5 - briefing.com/investor/calendars/economic/2012/06/25-29 [6/29/12]
6 - montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [6/29/12]
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 |
"A friendship founded on business is better than a business founded on friendship."
John D. Rockefeller |
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Riddle of the Week
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Two sailors stand at opposite sides of a boat. One looks west and the other looks east - and yet, they are both able to see each other clearly. How can this be?
Last week's riddle:
It can be told and made, and cracked and played - and yet, it is only spoken. What is it?
Last week's answer:
A joke. |
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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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