Greetings!
We all know what to do, so why don't we do it?
The other day, one of our favorite clients pulls out his iphone and shows me how he is on track to losing 20 pounds by Christmas. He's counting the calories through an app and he's exercising to match or exceed the calorie intake. The results are impressive!
It's much easier to say we're going to do something than to actually follow our own instructions. Two fundamentals determine our body weight: how much we eat and how much we exercise. It's all about calories in/calories out. Today, recent technological advancements give us the opportunity to count the calories of almost any food, at the moment we eat it, and we can chart our progress on a phone.
Investing is like that. Two parts of our brain are battling it out. The cortex knows that certain, time-tested methods of choosing good investments deliver long-term out-performance. Yet, over short periods of time our limbic brain is saying, "fight or flight!" We're simultaneously fighting the urge to bail out of the stock market in a panic and the desire to outperform the market using tried-and-true investment philosophies.
During an election year, it's best to hang on for a bumpy ride. More on this coming soon.
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| A&I Welcomes Judson Cass to Team | 
Join us in welcoming Judson Cass to the wealth management team at A & I Financial Services.
Judson brings over 15 years of experience in the financial services industry. He has served in many areas of the industry, including trust services, equity trading, options trading, market making and investment consulting. Judson holds the Accredited Asset Management Specialist® designation from the College of Financial Planning. Outside of work, he enjoys spending time with his wife and two children hiking, biking and swimming. |
| Weekly Economic Update | |
MORE HOMEBUYING IN JULY
Census Bureau data showed new home sales increasing 3.6% in July to a two-year peak, with an annual gain of 25%. In addition, the National Association of Realtors reported a 2.3% gain in existing home sales last month; residential resales were 10% improved from 12 months ago. The latest edition of the Federal Housing Finance Agency's Home Price Index showed prices 1.8% higher for the second quarter (the best quarter since Q4 2005) and 3.0% higher year-over-year.(1,2)
DURABLE GOODS ORDERS SEND MIXED MESSAGE
Overall hard goods orders rose 4.2% in July, but they fell 0.4% for the month with transportation orders subtracted. Core capital goods orders fell 3.4% in July, the most severe monthly decline since November and the fourth retreat in five months.(3)
DID THE FED HINT AT QE3 ... OR NOT?
The August 1 Federal Reserve policy minutes noted: "Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery." Does that imply QE3? Not according to St. Louis Fed president James Bullard, who dismissed the minutes as "stale" on Thursday and noted that stocks are "looking at all-time highs". Friday, however, the Wall Street Journal cited a letter from Fed Chairman Ben Bernanke noting that there was "scope for further action" by the Fed to "ease financial conditions and strengthen the recovery." Investors are hoping for a decisive FOMC move in September.(4,5,6)
MARKET PULLS BACK
All three major U.S. indexes retreated last week, as follows: DJIA, -0.88% to 13,159.02; S&P 500, -0.46% to 1,411.68; NASDAQ, -0.19% to 3,070.73. In the commodities markets, COMEX gold gained 3.30% on the week while NYMEX crude rose 0.15%; gold ended the week at $1,672.90, oil at $96.15. A gallon of unleaded averaged $3.73 nationwide Friday.(7,8)
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| Market Summary |
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% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
+7.71 |
+16.24 |
-0.33 | |
NASDAQ |
+17.87 |
+24.44 |
+3.83 | |
S&P 500 |
+12.25 |
+19.88 |
-0.92 |
(Source: msn.money.com, bigcharts.com, treasury.gov, treasurydirect.gov - 8/24/12). 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 - www.nytimes.com/2012/08/24/business/economy/claims-for-jobless-benefits-rise.html [8/24/12]
2 - www.bloomberg.com/news/2012-08-23/house-prices-rose-most-since-2005-in-second-quarter-fhfa.html [8/23/12]
3 - www.mysanantonio.com/news/article/Drop-in-key-US-durable-
goods-orders-shows-weakness0inhp [8/24/12]
4 - www.sfgate.com/business/bloomberg/article/Many-on-FOMC-Favored-Easing-Soon-If-No-Sustained0inhp [8/23/12]
5 - www.bloomberg.com/news/2012-08-23/fed-s-bullard-says-fomc-minutes-stale-economy-stronger.html [8/23/12]
6 - www.ajc.com/business/a-word-from-bernanke-1505404.html [8/24/12]
7 - money.msn.com/market-news/post.aspx?post=a498bd60-281a0in6-8fdc0in3ddb041b7 [8/24/12]
8 - montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [8/24/12]
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 |
"The opposite of a correct statement is a false statement. The opposite of a profound truth may well be another profound truth."
Niels Bohr |
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Riddle of the Week
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A major league pitcher faces just 27 hitters in a baseball game. He retires all of them, allowing no runs and no hits. Still, his team loses the game 4-0. How is this possible?
Last week's riddle:
What is the longest word in the English language to have only one vowel repeated? (Hint: It has 16 total letters and the vowel is repeated 4 times).
Last week's answer:
Strengthlessnesses |
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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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