Greetings!
A national debt, if it is not excessive, will be to us a national blessing.
--Alexander Hamilton After the election, stock markets were thrown out of the pot and into the fire. We are quickly approaching the "fiscal cliff" and what many of you know as "sequestration," or the sudden loss of jobs for many Coloradoans employed in the industries associated with Federal funding. The drama that surrounds our national politics seems more prevalent now than in the past, but the drama between our Founding Fathers was at least as vexing. Alexander Hamilton fought for a national debt, and relieved the colonies of their debts. This financial move brought the country together at a very tenuous time. Today, the same debt, clearly excessive, threatens our country. We've accumulated more debt recently than in any time in history, and every dollar spent on debt repayment is another dollar that cannot be spent (or not spent) towards growth. The next few months will be interesting! Investors today must take a long-term approach. We have tools that offer guarantees, if that is of interest to you. We have long-term appealing rates of return in our toolbox. However, I know of no investment that can simultaneously eliminate short-term volatility and still provide exceedingly appealing long-term returns. Thus, patience is the operative word for the months and year ahead. |
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Save the Date:
Friday, December 7th 4:30pm to 7:30pm |
A&I Financial Services' annual holiday party is approaching quickly. Please put the date on your calendar and watch for your invitation coming soon. |
| Weekly Economic Update | |
HANDSHAKE OR STALEMATE AT THE FISCAL CLIFF?
President Obama addressed the dilemma of the fiscal cliff, saying Friday that he was "open to compromise" but noting that he would not accept "any approach that isn't balanced." Earlier, House Speaker John Boehner told ABC News that a deal including tax increases would be "unacceptable," noting that tax code reform would be necessary for any movement. While negotiations between the President and Congressional leaders start this week, Obama and Boehner have held to their stances on the Bush-era tax cuts: on Friday, the President asked Congress to preserve the cuts for the middle class and raise taxes for the wealthiest 2% of Americans, while Speaker Boehner said that the cuts should be extended into 2013 in their entirety. (1)
SERVICE SECTOR GROWTH SLOWS
The Institute for Supply Management's latest non-manufacturing index showed a 0.9% decline for October. The 54.2 reading reflected strong but slightly less robust expansion in the service sector. ISM's non-manufacturing employment index rose for the third straight month, however. (2)
CONSUMER SENTIMENT METER CONTINUES ITS RISE
November's initial University of Michigan consumer sentiment survey showed more improvement with a reading of 84.9, up from 82.6 in the final October survey. That surpassed the 82.9 consensus forecast of economists polled by Bloomberg.(3)
WORRIES HINDER STOCKS
Anxieties over the fiscal cliff prompted a flurry of selling on Wall Street last week. The Dow (-2.12% to 12,815.39), S&P 500 (-2.43% to 1,379.85) and NASDAQ (-2.59% to 2,904.87) retreated severely. NYMEX crude rose 1.43% across five days to settle at $86.07 Friday; COMEX gold gained 3.32% to conclude the week at $1,730.90. (4,5) |
| Market Summary |
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% Change |
Y-T-D |
1Yr Chg |
5-Year Avg | |
DJIA |
+4.89 |
+8.78 |
-0.35 | |
NASDAQ |
+11.50 |
+10.80 |
+2.11 | |
S&P 500 |
+9.72 |
+12.27 |
-1.02 |
(Source: msn.money.com, bigcharts.com, treasury.gov, treasurydirect.gov -11/09/12). 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 - abcnews.go.com/Politics/OTUS/boehner-grips-deficit-2013/story?id=17679762 [11/9/12]
2 - www.ism.ws/ISMReport/NonMfgROB.cfm [11/5/12]
3 - www.sfgate.com/business/bloomberg/article/Michigan-
Consumer-Sentiment-Index-Increased-More-4023708.php [11/9/12]
4 - money.msn.com/market-news/post.aspx?post=782e76c9-c90c-4ab2-8fff-26b13b3b7d89 [11/9/12]
5 - montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [11/9/12]
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 |
"To conquer fear is the beginning of wisdom."
Bertrand Russell |
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Riddle of the Week
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It has no body, but it has a copper head and copper tail. It can be found in the street and in just about any store. What is it?
Last week's riddle:
Einstein's Riddle: A man meets a bear in a wasteland. Both are startled. The man runs north and the bear runs west. Suddenly, the man aimed his gun south and shot the bear. What color was the bear?
Last week's answer:
White; for the man to do what is described, he must be standing exactly on the North Pole, so the bear has to be a polar bear. |
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